Axon Enterprise (AXON) has emerged as a standout performer in the S&P 500, experiencing a notable rise following the release of its first-quarter earnings. The company not only exceeded expectations but also provided an optimistic outlook for the remainder of the year, driven by strong international sales and the burgeoning popularity of its Draft One AI tool, despite some uncertainty surrounding federal government contracts due to budget constraints triggered by DOGE.
In a significant move to expand its AI capabilities, Axon recently launched Axon Assistant. This innovative feature equips body cameras with voice-enabled translation, capable of supporting 50 different languages right out of the gate. CEO Rick Smith pointed to the introduction of the next-generation Apollo Dart, designed for the Taser 10, as a pivotal development that positions Axon as a formidable player in reducing the need for lethal force.
### Earnings Overview
In its latest results, Axon reported an impressive first-quarter adjusted earnings per share of $1.41. This figure reflects a robust 23% increase compared to the same period last year and surpassed analyst estimates by 14 cents. Revenue also surged by 31%, reaching $603.6 million, comfortably exceeding projections of $586.4 million.
Looking ahead, Axon has revised its full-year revenue forecast to between $2.6 billion and $2.7 billion, an increase from a prior range of $2.55 billion to $2.65 billion. This change signifies an anticipated growth of about 27% at the midpoint. Furthermore, the company has adjusted its expectations for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to a range of $650 million to $675 million, up from the previous estimate of $640 million to $670 million. Notably, Axon maintains its EBITDA margin outlook at around 25%, taking into account existing tariff levels, even though parts for its Tasers are sourced from overseas.
### Stock Performance
On Thursday, Axon’s stock soared by 6.8%, reaching 642.49 during early trading. Since April 23, the stock has shown a consistent upward trajectory, having broken above its 50-day moving average. However, it remains approximately 16% shy of a key cup buy point at 715.99. Investors might consider the high of 638.35 from May 2 as a potential entry point.
Given the current market landscape, many analysts recommend that investors focus their portfolios on stocks that demonstrate lower volatility, typically characterized by an average true range (ATR) of 6% or less. Axon’s 21-day ATR currently stands at 4.07, indicating relatively stable price movements.
Stay tuned for ongoing updates on Axon’s performance and market trends to inform your investment strategies effectively.
