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On Wednesday, TD Cowen maintained a Buy rating on Axon Enterprise (NASDAQ:AXON) and lifted the price target to $725 from $700. According to InvestingPro data, analysts maintain a strong bullish consensus on the stock, with price targets ranging from $413 to $800, reflecting the market’s confidence in the company’s growth trajectory. The adjustment follows Axon’s robust fourth-quarter performance and a forward-looking revenue guidance for fiscal year 2025 that is projected to surpass analyst expectations by 25%, a figure that TD Cowen deems conservative. The firm anticipates actual growth could reach 30-35% based on a revenue base of over $2 billion. This optimism is supported by Axon’s impressive track record, with revenue growing over 32% in the last twelve months and maintaining a 30% compound annual growth rate over the past five years.
The analyst, Andrew Sherman, highlighted Axon’s significant achievements in the fourth quarter, including the closing of 10 deals as part of its AI Era plan and anticipates a strong adoption rate for the year. Axon’s recent performance in new markets, particularly with Enterprise, where it secured its largest deal ever in Logistics, and International markets, which saw bookings increase by 50% quarter-over-quarter, has been notably strong.
Sherman expressed confidence in Axon’s valuation, citing its trading at 14 times its estimated sales for the calendar year 2026, which presents an attractive opportunity for investors. He recommended adding to positions, especially after the stock’s 30% decline in the past week. InvestingPro analysis indicates the stock is currently in oversold territory, with a significant 16% decline in the past week despite maintaining strong fundamentals and a "GOOD" overall financial health score. For investors seeking deeper insights, InvestingPro offers comprehensive analysis with over 20 additional exclusive tips and a detailed Pro Research Report covering what really matters about Axon Enterprise. The analyst also mentioned that management addressed several investor concerns during the earnings call, including the Flock partnership, federal exposure, state and local budget impacts, and tariffs. The reassurances provided by management, coupled with the strong guidance, are expected to alleviate these concerns.
TD Cowen’s optimism is reinforced by management’s historical pattern of conservative guidance, which has consistently yielded an 11-point upside compared to initial guide midpoints over the last two years. The company’s solid financial position is evident in its impressive gross profit margin of nearly 60% and strong balance sheet, with more cash than debt and liquid assets exceeding short-term obligations. Discover more detailed financial metrics and analysis with a subscription to InvestingPro, where you’ll find exclusive insights and comprehensive research reports on over 1,400 US stocks. This trend supports the firm’s expectation of a potential 30-35% growth for the current year, with a revenue run rate of $2.3 billion.
In other recent news, Axon Enterprise reported strong fourth-quarter 2024 earnings, surpassing expectations with a non-GAAP EPS of $2.08 against a consensus estimate of $1.43. The company’s revenue reached $575.1 million, marking a 34% year-over-year increase and exceeding forecasts. The impressive financial results prompted JPMorgan to raise its price target for Axon to $665, citing robust demand and a strong product portfolio. Needham maintained its Buy rating with a $600 price target, highlighting Axon’s consistent growth across various product categories.
Craig-Hallum adjusted its price target for Axon to $600, reflecting current market conditions and investor sentiment. Citizens JMP reiterated a $725 price target, emphasizing Axon’s financial performance and market potential. Analysts noted Axon’s substantial backlog of $10.1 billion and the company’s positive revenue guidance for fiscal year 2025, projecting a 25% increase at the midpoint. Axon continues to expand its offerings, particularly in AI and drone technology, with an Annual Recurring Revenue (ARR) reaching $1 billion.
The company addressed investor concerns over potential federal budget cuts and the end of its partnership with Flock Safety, downplaying risks while emphasizing opportunities in new customer verticals. Axon’s management remains optimistic about future growth, supported by strong demand trends and strategic positioning in various markets.
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