On Monday, Baird reiterated its positive stance on Axon Enterprise (NASDAQ:AXON), raising the price target to $460 from the previous $440 while keeping an Outperform rating on the stock. The firm expressed strong confidence in the company's ongoing trends and anticipates a robust third-quarter performance that could surpass expectations. This forecast is supported by what Baird identifies as broad-based strength within the company's operations.
Axon is scheduled to release its third-quarter earnings report after the market closes on November 7, 2024. Baird's analyst anticipates that the report will not only meet but potentially exceed market expectations, contributing to a 'beat and raise' scenario. This optimism is based on the company's consistent performance and the analyst's trust in the company's growth trajectory.
The stock has experienced a significant surge in its value over the year, registering a 65% increase compared to the S&P 500's 20% and the NASDAQ Composite's 22% gains. Since the second-quarter report, Axon's shares have climbed by 44%, reflecting high market expectations leading up to the upcoming earnings announcement.
Despite the stock's impressive rally, Baird suggests that it remains one of their top picks. The firm indicates a preference for buying on any potential dips in the stock's price following the recent sharp rise. The updated price target of $460 reflects Baird's continued endorsement of Axon as a strong investment option.
In other recent news, Axon Enterprise has seen a series of significant developments. Both Needham and Goldman Sachs (NYSE:GS) maintained their Buy ratings on Axon, citing the company's AI innovations and sustained revenue growth. Needham increased its price target for Axon from $400 to $525, while Goldman Sachs raised its shares price target to $441 from $385. Baird, another financial services firm, also maintained its Outperform rating on Axon, raising the stock's price target to $400 from $360.
These upgrades followed Axon's record-breaking second quarter, with revenue exceeding $500 million and new business bookings surpassing $1 billion. This growth was primarily driven by new products like TASER 10 and Axon Body 4, and a shift in revenue mix, with software and services accounting for 39% of total revenue.
The Campbell Police Department received a Federal Aviation Administration waiver for beyond visual line of sight drone operations using Axon's advanced DedroneBeyond technology. This approval enhances the department's Drone as a First Responder program by enabling round-the-clock drone operations.
InvestingPro Insights
Axon Enterprise's robust financial performance aligns with Baird's optimistic outlook. According to InvestingPro data, Axon's revenue growth stands at an impressive 32.59% over the last twelve months, with a notable 34.57% quarterly growth in Q2 2024. This strong growth trajectory supports Baird's expectation of a potentially strong third-quarter performance.
InvestingPro Tips highlight that Axon's net income is expected to grow this year, and analysts anticipate sales growth in the current year, further reinforcing the positive sentiment expressed in the article. The company's impressive gross profit margins, currently at 59.81%, underscore its operational efficiency and potential for continued strong performance.
It's worth noting that while Axon is trading at a high earnings multiple with a P/E ratio of 110.41, it also has a PEG ratio of 0.61, suggesting it may be undervalued relative to its growth prospects. This could explain Baird's continued bullish stance despite the stock's significant rally.
For investors seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for Axon Enterprise, providing a deeper understanding of the company's financial health and market position.
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