TD Cowen reiterates Buy rating on Axon Enterprise stock, sees growth durability

Investing.com - TD Cowen has reiterated its Buy rating and $925.00 price target on Axon Enterprise (NASDAQ:AXON), naming it the firm’s "Best Idea for 2026." This target represents a 74% upside from the current price of $531.09, significantly higher than the average analyst target of 53% upside.

The research firm cited "lots of durable growth drivers" that should support another year of very high growth at approximately $3 billion scale, with strong momentum in both new markets and new products expected to sustain growth durability for years. InvestingPro data confirms this growth trajectory, showing Axon’s impressive 32% revenue growth over the last twelve months and a 31% five-year revenue CAGR, alongside robust gross profit margins of 60.4%.

TD Cowen views the recent pullback in Axon shares following its third-quarter earnings report as an overreaction, describing the current valuation of approximately 10 times EV/CY27E Sales as "a very compelling entry point" compared to the mid-to-high teens average multiple seen earlier this year. The stock has indeed taken a significant hit, down 28.5% over the past six months, with InvestingPro indicating the RSI suggests the stock is in oversold territory.

The firm highlighted Axon’s connected hardware/software ecosystem, strong new product innovation, large and loyal customer base with a 60+ NPS score, and new market traction as factors that have created a "growth powerhouse" with over 30% growth in the past four years.

The $925 price target represents a multiple of 18 times EV/CY27E Sales, with TD Cowen recommending investors add to positions following the stock’s 40% decline from recent highs.

In other recent news, Axon Enterprise reported a 31% revenue growth in the third quarter, surpassing analyst expectations of 29.5%, although it was noted that this beat was smaller than previous trends. RBC Capital has initiated coverage on Axon with an Outperform rating, citing expectations for sustained revenue growth driven by opportunities within the U.S. public safety market. Meanwhile, CFRA has upgraded Axon from Buy to Strong Buy, despite lowering its price target to $785. TD Cowen reiterated its Buy rating on Axon, maintaining a price target of $925, acknowledging the company’s strong growth. Piper Sandler lowered its price target to $753 from $893 while keeping an Overweight rating, following a pullback in Axon shares after quarterly results. Needham also maintained its Buy rating with a price target of $870, noting that Axon exceeded its revenue estimates by 240 basis points. These developments reflect varied analyst perspectives on Axon’s performance and future prospects.

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