Axon Enterprise, Inc. AXON is benefiting from persistent strength in its Software & Services segment. In the first quarter of 2026, the segment’s revenues increased 35% year over year, driven by an increase in the aggregate number of users to the Axon network.
Growing popularity for the company’s digital evidence management and higher adoption of its latest software offerings are driving the segment’s growth. Also, strong demand for premium add-on features is aiding the segment. Existing customers are consistently returning to purchase additional services, reflecting strong customer satisfaction and engagement. This ongoing expansion supports a growing base of annual recurring revenues (ARR).
Given the rising global demand for Counter-Unmanned Aircraft Systems (CUAS), Axon is also witnessing strong momentum in its Dedrone platform. Revenues from the Dedrone platform saw robust growth of about 300% year over year in first-quarter 2026. The company also recently launched Dedrone C2, an upgraded version of the platform. This C2 version comes with enhanced sensor fusion technology, offering stronger detection capabilities.
Strong customer alignment, increased adoption across sectors and continuous product innovation led Axon to issue bullish guidance for 2026. The company currently expects revenues to increase approximately 30-32% year over year compared with 27-30% guided earlier.
Segment Performance of AXON's Peers
Among its major peers, Kratos Defense & Security Solutions, Inc. KTOS Government Solutions segment’s first-quarter 2026 revenues increased 20.4% year over year to $288.4 million. Higher sales of Kratos’ Defense and Rocket Support, Turbine Technologies and Microwave Products units aided the results. Kratos Defense derived 77.7% of its total revenues from this segment during the quarter.
Its another peer, Woodward, Inc.’s WWD Industrial business segment reported net sales of $387 million in the second quarter of fiscal 2026, up 20% year over year. Woodward generated 35% of its total sales from this segment in the quarter. The revenue growth for Woodward’s Industrial business segment was driven by higher demand for power generation equipment and services, along with favorable conditions in marine transportation and steady investment in parts of oil and gas.
AXON’s Price Performance, Valuation and Estimates
Shares of Axon have gained 14.4% in the past month against the industry’s decline of 0.2%.
From a valuation standpoint, AXON is trading at a forward price-to-earnings ratio of 60.72X, above the industry’s average of 48.00X. Axon carries a Value Score of F.
The Zacks Consensus Estimate for AXON’s 2026 earnings has increased 15.6% over the past 60 days.
The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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 Up
Want 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
Axon Enterprise, Inc (AXON): Free Stock Analysis Report
Woodward, Inc. (WWD): Free Stock Analysis Report
Kratos Defense & Security Solutions, Inc. (KTOS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research