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Time For Axon's Stock To Take A 'Breather,' JPMorgan Says

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Time For Axon's Stock To Take A 'Breather,' JPMorgan Says

Shares of Axon Enterprise Inc (NASDAQ: AAXN), formerly known as Taser International, have gained 156 percent since the start of 2018 and now is the time for the stock to take a "breather," according to JPMorgan.

The Analyst

JPMorgan's Mark Strouse downgraded Axon from Overweight to Neutral with an unchanged $66 price target.

The Thesis

Multiple factors led to Axon's stock outperformance in 2018, including a refocus on profitable growth, faster than expected growth in the overall weapons business market, revising guidance higher, and the acquisition of its closest body-cam competitor Vievu, which adds multiple large and accretive contracts.

The company's strong momentum pushed its stock above Strouse's already Street-high price target of $66. As such, the stock's premium relative to the analyst's target now implies the company needs to demonstrate traction in multiple initiatives, including RMS (Records Management System), Axon Artificial Intelligence, and a strong international expansion.

Nevertheless, long-term investors shouldn't be rushing to sell their stock as the company is still well positioned to benefit over time from "one of the strongest secular themes" of weapons and body-cam, the analyst wrote.

Price Action

Shares of Axon were trading lower by 7 percent at $63.10 Thursday afternoon.

Related Links:

Taser Offers One-Year Free Body-Cam Trial To Every Police Officer In America

Taser And Digital Ally's Competition Extends Beyond The Market

Photo courtesy of Axon.

Latest Ratings for AAXN

DateFirmActionFromTo
Feb 2021NeedhamMaintainsBuy
Jan 2021Morgan StanleyUpgradesEqual-WeightOverweight
Dec 2020JMP SecuritiesDowngradesMarket OutperformMarket Perform

View More Analyst Ratings for AAXN
View the Latest Analyst Ratings

 

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