Brad Freeman
Equity Researcher, Creator of Stock Market Nerd
Axon's acquisitions are paying off fast, and its growth has held across many cycles. President Josh Isner says Axon will durably grow revenue over 30% with expanding EBITDA margins. Per its last call, Axon has booked over 1.5x what it paid for Fusus and Dedrone, and @StockSavvyShay notes its counter-drone product is growing 300% a year. A large hardware moat in a strictly regulated sector keeps it fairly safe from disruption; margins should be stable this year, with expansion expected next. x.com x.com x.com x.com x.comÂ
Axon's very strong Q1 and rising bookings support its growth case. Revenue was $807 million versus $779 million expected, EPS $1.61 versus $1.60, and net retention 125%. It guides 2026 revenue growth of 30-32%, with future contracted bookings up 44%. Stock-based compensation remains the main drawback, with about 4.5% share dilution that is high but should come down materially over time. x.com x.comÂ
Axon's potential to compound for a long time makes it look undervalued. x.comÂ
Axon still looks a little expensive even after falling 60% from its highs, and it only looks cheap at a forward P/E in the 20s, around the $250s. Revenue is expected to grow 30% a year for two to three years and its forward sales multiple has compressed from 22.9 to 7.8 times. Support should hold in the high $320s; a tiny swing position is justified only above $325. x.comÂ
Axon is attempting to start a new Stage 2 uptrend in Stan Weinstein's Stage Analysis, the transition that often produces the biggest winners. It completed a Stage 4 decline, built a six-month Stage 1 base, and reclaimed its 200-day moving average and all-time-high anchored VWAP. The public-safety ecosystem of TASERs, body cameras and AI software is projected to grow revenue from $3.0B to $6.1B by 2028 and EPS from $2.98 to $13.73. x.comÂ
Axon is the only drone-related stock worth touching, because it offers network effects rather than a commodity product. x.comÂ
Axon is scaling operating expenses faster than profit, and investors will want to see operational efficiency before the stock gets bid up again. Its revenue growth is among the most impressive around, but the falling stock is not one to catch until that trend flips. x.com x.comÂ
AppLovin's e-commerce advertiser base, the part of the business the whole bull case depends on, appears to be compounding at double digits weekly while the stock sits at recent lows. Posts report Axon Pixel installs up 11.7% week over week, which if true is extremely bullish. The pixel lets AppLovin's AI see what people buy after clicking an ad, so it is basically a live count of e-commerce advertisers, and more pixels mean more advertisers and a smarter engine for all of them. x.comÂ
Axon is an incredible company, but its roughly $42B price already assumes much of management's 2028 plan. That is about 11.4-11.6x projected 2026 revenue and 45x estimated adjusted EBITDA; 25x the 2028 target of about $1.68B EBITDA is roughly today's value. Revenue grows above 30%, AI is already monetized and switching costs are high, yet near-perfect expectations can mean weak returns. Q1 net income leaned on investment gains, and stock-based compensation and dilution need watching. x.com x.comÂ
Axon Enterprise still trades at too much of a premium, even though it is an amazing company with a strong moat. The latest quarter was good, but it raised some concerns, or at least questions, about margins. x.comÂ
Axon still trades at about 50x forward earnings despite falling roughly 50% from its all-time high, a reminder to avoid overpaying for growth. x.comÂ