One stock that is defying all macroeconomic concerns in 2023, and has been for years, is Taser maker Axon Enterprise . Axon shares are up nearly 30% this year, guiding them to their eighth straight annual gain. Last year, the stock rose 5.7%, while the S&P 500 fell 19%. Shares also proved resilient last week, posting small gains despite market volatility fueled by the global banking crisis. Even more impressively, the stock has posted losses only twice in the last 15 years. The notable streak comes as the company expands beyond its flagship Taser to a suite of offerings including body cameras. This comes at the same time as public accountability for police officers is gaining momentum. “What they’ve essentially done is put a single product, the Taser, into a multi-product ecosystem family,” said Joshua Reilly, principal analyst at Needham. AXON mountain 2013-03-15 Axon Enterprise stock over the past 10 years The company has a bullish outlook on its business, saying last month it forecast more than $2 billion in 2025, or more than 20% sustained average annual revenue growth. And Reilly expects the latest update to Taser itself to lead to a new upgrade cycle — similar to the ones we’ve seen when Apple releases a new iPhone. “It’s a similar dynamic,” Reilly added. “This will help them replace the older Taser models that are in service today, but also expand opportunities for Taser at home and abroad.” Expanding Ecosystem Axon has been expanding its business for years as it launches an increasingly sophisticated suite of law enforcement products that includes body cameras, in-vehicle cameras and cloud-based software solutions. While other smaller firms offer these products, Axon is gaining market share by leveraging its relationship with law enforcement. The Taser maker has a customer relationship with roughly 17,000 of the 18,000 law enforcement agencies in the U.S., according to a report this month from Goldman Sachs. The firm also has 1,200 dedicated sales representatives for the largest agencies, which represent 70% of patrol officers. The body camera is also “extremely important” to Axon at a time of greater demands for transparency in law enforcement departments, particularly because it helps provide high-quality footage of an incident, Needham’s Reilly said. Axon quickly expanded sales. Over the past five years, the company’s net sales jumped to $1.189 billion in 2022, up from $343.8 million in 2017. At the end of 2023, those sales are expected to grow to at least $1.43 billion, according to Axon. Sure, a slowdown in the product cycle could hurt stocks. However, Needham’s Reilly said the firm is focused on reducing the dilution of its stock-based compensation and increasing the company’s free cash flow. Both are attractive moves for investors. And Goldman Sachs analyst Michael Ng, who initiated coverage of the stock this month with a buy rating, says the stock is up more than 20% since Friday’s close. Public liability The latest version of the Taser, which was launched in January, is said to have more safety features and be more effective. Among other changes, the Taser 10 has a lower voltage than its predecessor. It also allows users to aim the probes individually instead of having to aim two at the same time at a person. According to Axon Enterprise CEO Patrick Smith’s FactSet transcript of the firm’s fourth quarter, the changes could prompt officers in some states, particularly those without publicly available guns, to switch to Tasers as their primary weapon instead of handguns. conference call earlier this month. “This may be the first version of the Taser, where some countries in some regions are experimenting with officers carrying only a Taser — and not a gun and a Taser,” Needham’s Reilly said. “Making the Taser a safer and more effective gun replacement is extremely important,” Reilly said. “Because if officers have confidence that a Taser will take you down — which I think they’ll have more confidence in the Taser 10 than any other Taser in history — at the end of the day, that’s going to lead to fewer police shootings,” he said. he said.
