Axon Enterprise Receives Strong Buy Rating from Top Analyst

Barclays's Tim Long raised their price target on Axon Enterprise (NASDAQ: AXON) by 23.7% from $308 to $381 on 2024/05/08. The analyst maintained their Strong Buy rating on the stock.

Axon Enterprise, a company that develops and sells conducted energy devices (CEDs) under the TASER brand, recently reported their Q1 2024 earnings. The results were impressive, with revenue up 34% year-over-year, marking the ninth consecutive quarter of revenue growth over 25%. This strong start to the year led management to improve their outlook for FY 2024.

In Q1 2024, Axon Enterprise reported an EPS of $1.15, beating the Zacks Consensus Estimate of $0.97 and showing a significant increase of 30.7% compared to Q1 2023's $0.88. The company also exceeded expectations in terms of revenue, reporting $460.7 million, surpassing the Zacks Consensus Estimate of $438 million and showing a robust year-over-year growth of 34.3% compared to Q1 2023's $343 million. Additionally, adjusted EBITDA increased by 67.3% year-over-year, reaching $109 million.

Looking ahead, management provided guidance for FY 2024, expecting revenue in the range of $1.94 billion to $1.99 billion, an increase from the previous guidance of $1.88 billion to $1.94 billion. The adjusted EBITDA guidance was also revised upwards, now ranging from $430 million to $445 million, up from the previous guidance of $410 million to $430 million. Furthermore, the company expects capital expenditures (capex) to be in the range of $80 million to $95 million.

In a Letter to Shareholders, Axon Enterprise's management expressed their satisfaction with the strong start to 2024 and the company's impressive financial performance. They highlighted the 34% revenue growth in Q1, marking the ninth consecutive quarter of growth above 25%. The company's net income margin for Q1 was 28.9%, while the adjusted EBITDA margin was 23.6%.

Axon Enterprise's growth is driven by multiple factors, including the adoption of new products from existing customers and attracting new users to their ecosystem. The company's software revenue growth is particularly noteworthy, with Axon Cloud & Services revenue reaching $176 million, a 52% increase year-over-year. The company's integrated subscription plans and record demand for TASER and Sensors products contribute to its consistent growth.

The positive outlook for Axon Enterprise is reflected in the analyst ratings. According to the latest data, 100% of top-rated analysts currently rate AXON as a Strong Buy or Buy, with no analysts considering it a Hold or recommending selling the stock.

However, since the release of Axon Enterprise's latest quarterly report on May 6, 2024, the stock price has experienced a decline of 4.8%. On a year-over-year basis, the stock is still up by an impressive 40.6%. During this period, AXON has outperformed the S&P 500, which has seen a 25.4% increase.

Barclays analyst Tim Long, who raised the price target on AXON on May 8, is ranked in the top 4% out of 4,577 Wall Street analysts by WallStreetZen. With an average return of 11.8% and a win rate of 59.2%, Long specializes in the Technology, Real Estate, and Industrials sectors.

Axon Enterprise, Inc., formerly known as TASER International, Inc., develops, manufactures, and sells conducted energy devices (CEDs) under the TASER brand. In addition to CEDs, the company offers hardware and cloud-based software solutions that enable law enforcement to capture, securely store, manage, share, and analyze video and other digital evidence. With a strategic partnership with Fusus, Inc., Axon Enterprise continues to expand its capabilities and provide real-time operational situational awareness to law enforcement agencies.

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