Axon Enterprise has experienced a remarkable 2,000% increase in its stock price over the past decade. Despite this significant rise, analysts on Wall Street deem the company’s stock as undervalued, currently priced at $405 per share.
Among the forecasts, UBS analyst Andrew Spinola holds the most conservative outlook, maintaining a target price of $570 per share, suggesting a potential upside of 40% from the current valuation. Conversely, TD Cowen’s Andrew Sherman presents a more optimistic forecast with a target of $825 per share, indicating a potential upside of 103%.
In recent years, Axon has not matched the performance of tech giants such as Nvidia and Palantir. However, the company is actively integrating artificial intelligence into its range of products and services, capitalizing on a vast market that offers considerable growth potential.
Specializing in public safety technologies for law enforcement and government agencies, Axon’s product lineup includes Tasers, body-worn cameras, and a suite of software solutions for digital evidence management and operations. The company is enhancing its market leadership by developing AI products that complement its existing offerings.
In 2024, Axon introduced Draft One, a generative AI software designed to automate report writing using audio data from body-worn cameras. This innovative tool allows police officers to generate high-quality reports, significantly reducing the time spent on paperwork. The rapid adoption of Draft One marks it as the most quickly embraced software product in the company’s history.
Following this, the 2025 launch of Axon Assistant further integrates AI, allowing users to query evidence and reports using natural language and enabling real-time translation. Initially compatible with Axon’s body cameras and digital evidence management system, the software aims for broader integration in the future.
Recent financial results show strong performance, with revenue surging by 39% to reach $797 million, largely due to sales growth in both hardware and software sectors. Non-GAAP earnings saw an impressive 84% increase to $2.15 per diluted share. Additionally, contracts pending recognition, referred to as bookings, increased by 43% to $14.4 billion, hinting at solid growth prospects ahead.
Management projects a revenue growth of 29% annually, aiming to reach $6 billion by 2028, and places the total addressable market at an impressive $159 billion. Notably, Wall Street estimates suggest Axon’s adjusted earnings will grow at a rate of 24% annually through 2027, making the current valuation of 59 times adjusted earnings seem relatively reasonable.
While immediate triple-digit returns might not be in the cards, analysts recommend that patient investors consider building a small position in Axon. The consensus among 23 analysts covering the company shows a median price target of $700 per share, offering a tantalizing 72% upside from the current stock price of $405.
