Results: Axon Enterprise, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

Shareholders of Axon Enterprise, Inc. (NASDAQ:AXON) will be pleased this week, given that the stock price is up 17% to US$309 following its latest yearly results. It looks like a credible result overall - although revenues of US$1.6b were in line with what the analysts predicted, Axon Enterprise surprised by delivering a statutory profit of US$2.31 per share, a notable 13% above expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Axon Enterprise

Taking into account the latest results, the current consensus from Axon Enterprise's eleven analysts is for revenues of US$1.93b in 2024. This would reflect a sizeable 24% increase on its revenue over the past 12 months. Per-share earnings are expected to climb 10% to US$2.57. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.88b and earnings per share (EPS) of US$2.61 in 2024. There doesn't appear to have been a major change in sentiment following the results, other than the small lift in revenue estimates.

The consensus price target increased 17% to US$309, with an improved revenue forecast carrying the promise of a more valuable business, in time. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Axon Enterprise, with the most bullish analyst valuing it at US$339 and the most bearish at US$254 per share. This is a very narrow spread of estimates, implying either that Axon Enterprise is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of Axon Enterprise'shistorical trends, as the 24% annualised revenue growth to the end of 2024 is roughly in line with the 26% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.5% annually. So it's pretty clear that Axon Enterprise is forecast to grow substantially faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Axon Enterprise going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for Axon Enterprise that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.