Axon's $129 Billion Market Opportunity In Focus: Analyst Sees Strong Product Innovation And More

Citizens Capital Markets analyst Trevor Walsh reiterated the Market Outperform rating on Axon Enterprise Inc AXON, with a price forecast of $725.

On Tuesday, the company reported fourth-quarter results, with quarterly revenue of $575 million that grew 34% year over year, driven by double-digit growth in each product segment.

Walsh highlighted Axon’s total addressable market was now $129 billion, up from $77 billion in the first quarter of 2024, which reflected the growth from acquisitions like Fusus and Dedrone.

While current revenues of $2.1 billion were primarily from law enforcement, with only 15% market penetration, significant opportunities remained in real-time operations, drones and robotics, and AI solutions, contributing $20 billion, $20 billion and $17 billion, respectively, to the total addressable market.

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The analyst acknowledged some skepticism over these high total addressable market estimates but considered Axon’s strong customer mindshare, product innovation and go-to-market strategy to make this outlook credible.

Per the analyst, Axon’s international and enterprise opportunities were at an inflection point and expected to contribute significantly in FY25. Management’s focus on meeting with international clients and the potential of TASER 10 and AI-driven efficiencies are seen as key factors for accelerating foreign contract wins.

The analyst highlighted that Axon met its aggressive $4.0 billion bookings target for 2H24 and saw a significant acceleration in calculated billings to 54%.

The analyst described management’s guidance as more bullish than previous years, with the pipeline for FY25 looking stronger, which suggested potential upside to guidance as the year progresses.

AXON Price Action: AXON shares are trading higher by 16.63% to $579.26 at publication Wednesday.

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Photo: Courtesy Axon