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On Wednesday, Needham reiterated its Buy rating on Axon Enterprise (NASDAQ:AXON) with a steady price target of $600. The endorsement follows the company’s robust fourth-quarter results, which included a total contracted backlog of $10.1 billion. According to InvestingPro data, Axon has demonstrated impressive financial strength with $1.94 billion in trailing twelve-month revenue and a robust 59.75% gross profit margin. This figure has been adjusted to consider contracts that may be canceled for convenience. Axon has initiated its revenue guidance for the fiscal year 2025, aiming for a 25% increase at the midpoint, surpassing the anticipated ’whisper number’ and reflecting the strong bookings at the year’s end.
The company’s growth has been notably consistent across all its product categories, which include TASER, Sensors & Other, and Axon Cloud. Needham analysts highlighted Axon’s management addressing the controversy surrounding its partnership with Flock Safety. The analysts believe that the cessation of this partnership will not impact the Fleet 3 Automatic License Plate Recognition (ALPR) technology. Furthermore, they are optimistic about Axon’s potential to enter the fixed LPR market with fewer restrictions now that it has exited the partnership with Flock Safety.
The report also touched on the unchanged trends with U.S. Federal customers, with expectations set for another strong year in this particular market segment. Needham’s confidence in Axon is underscored by the company’s consistent performance and strategic positioning in its various markets. The $600 price target reflects this positive outlook for Axon’s future financial performance and market expansion. The stock has delivered an impressive 82.87% return over the past year, though InvestingPro analysis indicates it’s currently trading above its Fair Value, with analyst targets ranging from $413 to $800.
In other recent news, Axon Enterprise reported impressive fourth-quarter 2024 financial results, exceeding analysts’ expectations. The company achieved a non-GAAP earnings per share (EPS) of $2.08, significantly above the consensus estimate of $1.43, and recorded revenue of $575.1 million, marking a 34% increase year-over-year. Analysts from JPMorgan and Citizens JMP responded positively to these results, with JPMorgan raising Axon’s price target to $665 and Citizens JMP maintaining a target of $725, both reflecting confidence in Axon’s continued growth trajectory. Axon’s Annual Recurring Revenue (ARR) also saw a substantial increase, reaching $1 billion, up from $0.9 billion in the previous quarter. The company provided a robust revenue outlook for 2025, projecting between $2.55 billion and $2.65 billion, aligning with consensus estimates. Axon has seen strong demand across its product portfolio, particularly in its AI and cloud services, contributing to its strong financial performance. The company has also expanded its Total (EPA:TTEF) Addressable Market (TAM) estimation to $129 billion, emphasizing its confidence in sustained growth opportunities.
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