Axon Enterprise may be overvalued with strong growth indicators, but the 11 analysts following the company give it an average rating of buy. The analysts have set target prices ranging from $185.0 to $300.0 per share, for an average of $237.73. At today's price of $215.37, Axon Enterprise is trading -9.41% away from its average target price, suggesting there is an analyst consensus of some upside potential.
Axon Enterprise, Inc. develops, manufactures, and sells conducted energy devices (CEDs) under the TASER brand in the United States and internationally. Based in Scottsdale, AZ, the mid-cap Consumer Discretionary company has 2,821 full time employees. Axon Enterprise has not offered a dividend during the last year.
Axon Enterprise has a trailing twelve month P/E ratio of 108.8, compared to an average of 22.33 for the Consumer Discretionary sector. Based on its EPS guidance of 3.73, the company has a forward P/E ratio of 57.7. Based on the 226.8% compound average growth rate of Axon Enterprise's historical and projected earnings per share, the company's PEG ratio is 0.48. This EPS growth rate is likely not sustainable, so will substitute the broader market's 5-year projected EPS growth rate of 11.8%, which gives us a PEG ratio of 9.19. This suggests that these shares are overvalued.
Furthermore, Axon Enterprise is likely overvalued compared to its book value, since its P/B ratio of 12.1 is higher than the sector average of 3.12. The company's shares are currently trading 2013.7% above their Graham number, implying that they are overvalued in terms of earnings and book value.
So why are analysts giving AXON a good rating? We believe analysts could be encouraged by the company's impressive 38.1% rate of cash flow growth over the last 4 years. They might also believe Axon Enterprise's positive margin growth trend will continue.
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $531 | $681 | $863 | $1,190 |
| Revenue Growth | n/a | 28.28% | 26.78% | 37.82% |
| Gross Margins | 57.9% | 61.1% | 62.6% | 61.2% |
| Gross Margins Growth | n/a | 5.53% | 2.45% | -2.24% |
| Operating Margins | -1.2% | -2.1% | -19.5% | 7.8% |
| Operating Margins Growth | n/a | -75.0% | -828.57% | 140.0% |
| Net Margins | 0.17% | -0.25% | -6.95% | 12.37% |
| Net Margins Growth | n/a | -247.06% | -2680.0% | 277.99% |
| Earnings Per Share | $0.01 | -$0.03 | -$0.91 | $1.98 |
| EPS Growth | n/a | -400.0% | -2933.33% | 317.58% |
| Diluted Shares (MM) | 60 | 62 | 66 | 73 |
| Free Cash Flow (MM) | $49 | -$34 | $74 | $179 |
| FCF Growth | n/a | -169.71% | 315.81% | 141.53% |
| Capital Expenditures (MM) | -$16 | -$73 | -$50 | -$56 |
| Net Debt / EBITDA | n/a | n/a | n/a | 1.1 |
