Should Axon Enterprise Stock be in Your Portfolio Pre-Q2 Earnings?

Axon Enterprise, Inc. AXON is scheduled to release second-quarter 2025 results on Aug. 4, after market close. The Zacks Consensus Estimate for earnings is currently pegged at $1.54 per share on revenues of $643 million.The company’s second-quarter earnings estimates have increased 4.8% over the past 60 days. The bottom-line projection indicates an increase of 28.3% from the year-ago number. The Zacks Consensus Estimate for quarterly revenues indicates year-over-year growth of 27.6%.Image Source: Zacks Investment ResearchEarnings Surprise HistoryAxon Enterprise has an impressive earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 19.8%. In the last reported quarter, it delivered an earnings surprise of 11%.Earnings Whispers for AXONOur proven model predicts an earnings beat for the company this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks before they are reported with our Earnings ESP Filter.AXON has an Earnings ESP of +0.54% as the Most Accurate Estimate is pegged at $1.55 per share, higher than the Zacks Consensus Estimate of $1.54. It carries a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Axon Enterprise, Inc Price and EPS Surprise Axon Enterprise, Inc price-eps-surprise | Axon Enterprise, Inc QuoteWhat’s Likely to Shape Axon Enterprise’s Q2 Results?Strong demand for TASER devices and higher cartridge revenues is expected to have boosted the performance of Axon Enterprise’s Connected Devices segment in the second quarter. Also, strong customer response for its next-generation body-worn camera, Axon Body 4, and solid demand for virtual reality training services are expected to have driven the segment’s performance. The Zacks Consensus Estimate for the Connected Devices segment’s revenues is pegged at $364 million, which indicates an increase of 23.4% from the year-ago number.The Software & Services segment is expected to have put up an impressive show in the upcoming earnings, supported by the addition of new users and associated devices to the AXON network. Strong momentum in Axon Evidence and cloud services, driven by an increase in the aggregate number of users, average revenue per user and software add-ons, is also likely to have augmented the segmental top line.Rise in adoption of software applications, driven by increased demand for cloud-connected TASER devices, has been driving Axon Evidence and cloud services’ growth within the segment. The Zacks Consensus Estimate for the Software & Services segment’s net sales is pegged at $283 million, indicating a 35.4% jump from the year-ago number.The company remains focused on buyouts and strategic collaborations to expand its product offerings and customer base. This is likely to reflect in its second-quarter results. For instance, in October 2024, the company acquired Dedrone, a global leader in airspace security. The inclusion of Dedrone’s advanced airspace technology boosted AXON's capability to enable customers to protect their communities against drone threats and improve response to critical incidents. Also, in June 2024, Axon Enterprise entered into a partnership with Skydio (a leading U.S. drone manufacturer) to introduce a comprehensive line of drones in public safety that includes a scalable Drone as a First Responder solution.However, rising costs and operating expenses, due to business integration activities, higher wages and stock-based compensation expenses, are likely to have weighed on AXON’s bottom line.AXON’s Price PerformanceAXON shares have gained 20.3% in the past three months compared with the Zacks Aerospace - Defense Equipment industry’s 20.8% growth. The company’s shares have also fared comparatively better than the S&P 500’s increase of 12.2%. With respect to its major peers, Kratos Defense & Security Solutions, Inc. KTOS and Teledyne Technologies Incorporated TDY have surged 61.8% and 15.1%, respectively, in the same period.Three-Month Price PerformanceImage Source: Zacks Investment ResearchAxon Enterprise’s Valuation Remains an OverhangAXON’s lofty valuation remains a concern. The stock is trading at a forward 12-month price-to-earnings (P/E) ratio of 103.48X, much higher than the industry average of 52.76X. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours.In comparison with AXON’s valuation, its peers, Kratos Defense & Security and Teledyne Technologies, are trading cheaper. Notably, Kratos Defense & Security and Teledyne Technologies are trading at 99.12X and 24.15X, respectively.Price-to-Earnings (Forward 12 Months)Image Source: Zacks Investment ResearchInvestment ThesisWith a comprehensive and diversified product portfolio, Axon Enterprise has been capitalizing on the growing opportunities in the safety, drones and robotics end markets. The company’s strategic collaborations, investments in AI products and strength in the TASER 10 device market bode well ahead of its second-quarter earnings.An increase in the aggregate number of users to the Axon network, along with benefits from acquired assets, is likely to drive the company’s performance in the quarters ahead.Should You Buy AXON Now?Solid momentum across end markets, innovative product offerings, accretive acquisitions and strategic market expansions position Axon Enterprise favorably for strong second-quarter results.With a positive analyst sentiment, strong earnings projections and robust growth prospects, AXON is well-positioned to deliver sustained growth and shareholder’ value. We believe that the AXON stock is an ideal candidate for investor's portfolio addition.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Teledyne Technologies Incorporated (TDY): Free Stock Analysis Report Kratos Defense & Security Solutions, Inc. (KTOS): Free Stock Analysis Report Axon Enterprise, Inc (AXON): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks