Axon Enterprise Puts Competitive Worries in Rearview Mirror
Investors who sold off Axon Enterprise (NASDAQ:AXON) stock last week after a breakup with a technology partner, reversed course after the stun gun maker posted strong fourth-quarter earnings and forecast a strong 2025. It seems the concerns about Flock Safety becoming a threat to its dominance in law enforcement technology with its Taser, body cams, […] The post Axon Enterprise Puts Competitive Worries in Rearview Mirror appeared first on 24/7 Wall St..
Investors who sold off Axon Enterprise (NASDAQ:AXON) stock last week after a breakup with a technology partner, reversed course after the stun gun maker posted strong fourth-quarter earnings and forecast a strong 2025.
It seems the concerns about Flock Safety becoming a threat to its dominance in law enforcement technology with its Taser, body cams, and artificial intelligence tools may have been overblown.
24/7 Wall St. Insights:
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Axon Enterprise (AXON) is rebounding from a sharp downturn following a partnership breakup, but strong Q4 earnings and a robust outlook indicate the Taser maker can overcome the headwinds.
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The Taser maker posted its third consecutive year of growth in excess of 30%, with revenue forecast to grow 25% in 2025.
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While Flock Safety could be a competitive threat, Axon’s leadership position gives it a strong marketplace advantage.
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Going from strength to strength
Shares of Axon Enterprise are running 15% higher after its earnings report revealed some impressive numbers.
Axon raked in $575 million in revenue for the quarter, up 34% from last year, marking its 12th straight quarter of 25% or greater growth. For the full year, revenue hit $2.1 billion, nearly doubling from two years ago and marking the third year in a row its revenue grew greater than 30%.
Taser sales jumped 37% to $221 million, sensors like body cameras grew 18% to $124 million, and cloud services soared 41% to $230 million, driven by its AI Era Plan, including tools like Draft One and upcoming features like Live Translation. Annual recurring revenue hit $1 billion, a 37% increase, and net income climbed to $377 million, with an adjusted EBITDA margin of 25%. That’s a year earlier than what Axon was aiming for.
Looking ahead, Axon predicts 2025 revenue of $2.55 billion to $2.65 billion (up 25% growth) with adjusted EBITDA of $640 million to $670 million, indicating the public safety tech leader has high confidence in its AI, drones, and robotics push.
Flocking to the worst-case scenario
Still, doubts persist. The breakup with Flock Safety, announced earlier this month, has investors worrying Flock will present competition Axon hasn’t faced in some time. Known for its automatic license plate reader (ALPR) tech, Flock had been a key partner since 2020, helping Axon expand into real-time crime tracking. Now, Flock looks like it will become a rival, diving into license plate readers, drones, and crime centers.
Recently, Northcoast Research analyst Keith Housum downgraded Axon’s stock from “Buy” to “Neutral” on the potential threat Flock presents, fearing the competition could slow growth. AXON shares crashed 16% when it announced the split, closing at $593.42, and shares were still shaky prior to the earnings report.
Is Flock as big a threat as feared? Not necessarily, but it’s not nothing. Axon’s Q4 results show its core business is strong, with $10 billion in future contracted bookings and a pipeline healthier than ever, CEO Rick Smith told analysts.
Axon’s AI focus, like Draft One and Body 4 Live Translation (coming later this year), plus drone and robotics growth, could offset Flock’s rivalry. Because Axon was the one who initiated the breakup, it likely had backup plans in place, such as expanding Auror — an early pioneer in retail crime intelligence and incident management solutions that Axon invested in last year — or LiveView Technologies for retail security.
Flock’s $4.5 billion valuation, based on equity financing investments, and rapid growth are intimidating, but Axon’s scale (its market cap is $44 billion) and its presence in over 5,000 U.S. cities, give it an edge. Flock’s high prices could also alienate some clients, while Axon’s ethical ALPR design and Fusus integration remain competitive.
Key takeaways
Still, risks for Axon Enterprise loom. Pentagon budget cuts under Defense Secretary Pete Hegseth could hit Axon’s 60% government revenue, and Flock’s expansion into drones and crime centers could nibble at Axon’s market share.
Over the next year, Axon’s prospects look solid if it nails its AI and subscription growth, but Flock’s threat could slow momentum if it wins key contracts. Although Axon’s progress towards a stock split may have been temporarily derailed, look for AXON stock to stabilize. Volatility, however, remains likely if Flock gains traction or budgets tighten.
Still, Axon’s future still looks secure, even if the road ahead gets a bit bumpy.
The post Axon Enterprise Puts Competitive Worries in Rearview Mirror appeared first on 24/7 Wall St..
