Axon stock price target cut to $600 by Craig-Hallum

Wednesday, Craig-Hallum analyst Jeremy Hamblin adjusted the price target on Axon Enterprise (NASDAQ:AXON) to $600 from the previous $625 while maintaining a Hold rating on the stock. According to InvestingPro data, Axon’s stock currently trades at $562.45, with 13 analysts recently revising their earnings estimates upward. Hamblin’s analysis followed Axon’s recent earnings report, which highlighted strong performance with top and bottom line beats and a record $2.5 billion in bookings for the fourth quarter.

The company’s forward-looking guidance for Fiscal Year 2025 suggests continued growth, projecting another Rule of 50 year with expected increases in both revenues and adjusted EBITDA. This outlook aligns with the company’s impressive 32.3% revenue growth and robust gross profit margin of 59.8%. The analyst noted Axon’s management effectively addressed investor concerns regarding potential Federal government budget cuts and the impact on Axon contracts, as well as the minimal competitive business risk following the end of the Flock Safety partnership.

Despite the recent approximate 30% decline in Axon shares over the past week, Hamblin anticipates the positive commentary from the earnings call will contribute to a rebound in the stock price. However, he also recognized that the general market sentiment towards high-multiple stocks has shifted, which may result in sustained valuation pressures in the near term.

Hamblin pointed out that Axon anticipates its typical seasonality in FY25, with bookings growth expected to be more significant in the second half of the year, aligning with fiscal budget cycles. This seasonal pattern could potentially keep investment multiples compressed in the near term. The revised price target of $600 reflects these investor sentiment adjustments and the current market conditions.

In other recent news, Axon Enterprise has reported impressive fourth-quarter 2024 earnings, significantly surpassing analysts’ expectations. The company achieved a non-GAAP EPS of $2.08, well above the consensus estimate of $1.43, and reported revenue of $575.1 million, marking a 34% increase year-over-year. JPMorgan raised its price target for Axon to $665, citing strong financial performance and robust demand across its product lines, particularly in Axon Cloud & Services, which saw double-digit revenue growth. Needham maintained its Buy rating with a $600 target, highlighting Axon’s consistent growth and strategic positioning despite ending its partnership with Flock Safety. Citizens JMP also reiterated a Market Outperform rating with a $725 target, reflecting confidence in Axon’s continued market performance. The company’s Annual Recurring Revenue (ARR) rose to $1 billion, up from $0.9 billion in the previous quarter, bolstered by strong interest in premium product bundles. Axon has provided a positive revenue outlook for fiscal year 2025, projecting between $2.55 billion and $2.65 billion, and aims for a 25% year-over-year growth.

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