Market Overview

Why Axon Shares Got A Shock After The Q3 Print

Why Axon Shares Got A Shock After The Q3 Print
Benzinga's Top Upgrades, Downgrades For November 9, 2018
Benzinga's Top Upgrades, Downgrades For November 8, 2018
Axon's new Taser calls 911 when fired (Seeking Alpha)

Weapons technology company Axon Enterprise Inc. (NASDAQ: AAXN) reported a third-quarter earnings and sales beat Tuesday. Despite a surge in net income and a revenue increase of roughly 16 percent, the stock fell substantially following the report.

The Analyst

JPMorgan analyst Mark Strouse upgraded Axon from Neutral to Overweight and maintained a $68 price target. 

The Thesis

Axon’s reported guidance implies a dip in revenue growth in the fourth quarter, Strouse said in a Thursday note. (See his track record here.) 
The dip should be a temporary one, the analyst said. 

“The stock is now below the price of the May secondary offering, despite recent developments that we believe are long-term positives such as the launch of the TASER 7 and Axon Body 3, new officer safety payment plans with enhanced features and premium pricing, as well as being in closer proximity to the launch of Axon Records in mid-2019.”

Strouse expects that certain agencies will pause before deciding whether to buy older Tasers or the new TASER 7 in 2019. Contact announcements should demonstrate signs of progress and growth acceleration into 2019, he said. 

"We believe AAXN's uniquely strong position in a large addressable market, solid revenue growth momentum and improving EBITDA margins could provide upside to estimates over time." 

Price Action

Axon shares rose 4.95 percent to $53.21 during pre-market trading on Thursday. The stock had dipped over 15 percent following Wednesday’s close.

Related Links:

Analyst: The Bullish Case For Axon Isn't Based On Taser Sales Alone

Raymond James: Axon Still Underappreciated After 170% Pop

Photo courtesy of Axon. 

Latest Ratings for AAXN

Nov 2018BairdUpgradesNeutralOutperform
Nov 2018JP MorganUpgradesNeutralOverweight
Oct 2018Ladenburg ThalmannDowngradesBuyNeutral

View More Analyst Ratings for AAXN
View the Latest Analyst Ratings

Posted-In: earnings reportAnalyst Color Earnings News Guidance Upgrades Price Target Analyst Ratings Best of Benzinga


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