Axon Enterprise, Inc. AXON crossed its 200-day simple moving average (SMA) on June 30, reaching a key support level from a technical perspective. This reflects a positive market sentiment and confidence in the company's financial health and long-term prospects.
AXON Overtakes the 200-Day Moving Average
Considering the past few months’ price movement, the stock was seen outperforming the benchmarks, the broader industry, as well as its major peers. Over the past three months, shares of the company have surged 60.2%, outpacing the industry and the S&P 500, which have returned 16.6% and 13.3%, respectively.
Shares of its key rivals like Kratos Defense & Security Solutions, Inc. KTOS and Leonardo DRS, Inc. DRS have declined 23.1% and 5.3%, respectively.
3-Month Price Performance
Closing at $597.04 last Thursday, the stock is trading below its 52-week high of $885.92 but significantly higher than its 52-week low of $339.01. The stock is also trading above its 50-day moving average. With investors’ sentiment starting to pick up for Axon, it is the right time to assess the stock’s potential upside.
Factors Favoring the Company
Axon’s Connected Devices segment is thriving on the back of strong demand for TASER 10 devices. Growth in cartridge revenues, driven by the higher adoption of the TASER products, has also been augmenting the results. Solid demand for its next-generation body-worn camera, Axon Body 4 and counter-drone equipment also supports its growth.
In first-quarter 2026, revenues from the company’s TASER product line increased 19% year over year, driven by TASER 10, while those from the Personal Sensors surged 23%, led by Axon Body 4. Also, revenues from the Platform Solutions product line soared 95%, supported by counter-drone, virtual reality and fleet. Revenues from the Connected Devices segment surged 32.8% year over year in the quarter, following an increase of 29.1% in 2025.
The company is also witnessing solid momentum in its Software & Services segment, driven by an increase in the aggregate number of users to the Axon network. Continued momentum in digital evidence management and increased adoption of its latest software offerings are driving the segment’s growth.
Strong customer satisfaction and new engagement are consistently driving the purchase of additional services. This ongoing expansion supports a growing base of annual recurring revenues (ARR). After witnessing a year-over-year 39.6% jump in 2025 segmental revenues, the metric increased 35% in the first quarter.
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.
Also, the company’s acquisition of Carbyne (in February 2026) enabled it to come up with Axon 911, a state-of-the-art, fully integrated solution that is designed to connect callers and responders instantly. Driven by strength across its businesses, AXON currently expects 2025 revenues to increase approximately 30-32% year over year, higher than 27-30% guided earlier.
AXON’s Earnings Estimate Revision & Y/Y Growth Estimate
The company’s earnings estimates for 2026 have declined 3.6% to $7.83 per share over the past 60 days. However. the figure indicates year-over-year growth of 14.3%. Earnings estimates for 2027 have inched down 0.3% to $10.64 per share. The figure indicates year-over-year growth of 35.9%.
The Zacks Consensus Estimate for Axon’s 2026 revenues is pegged at $3.64 billion, indicating year-over-year growth of 31%. The consensus estimate for its 2027 revenues stands at $4.60 billion, suggesting an increase of 26.3% year-over-year.
Stock Valuation
The stock is trading at a forward 12-month price-to-earnings (P/E) ratio of 64.39X compared with the industry average of 46.82X. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours.
Both peers, Kratos Defense and Leonardo DRS, are trading cheaper compared with AXON. Notably, Kratos Defense and Leonardo DRS are trading at 63.07X and 32.09X, respectively.
Should You Buy AXON Stock Now?
Persistent strength across Axon’s TASER and Software & Sensors segments, along with its growing foothold in the counter-drone equipment market, positions it favorably for impressive growth in the quarters ahead. The company’s strategic acquisitions and investments in product innovations should also support its top-line performance.
Despite its expensive valuation, positive analyst sentiment and robust growth prospects indicate it is the right time for potential investors to bet on this Zacks Rank #2 (Buy) company. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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