Morgan Stanley: Axon Enterprise's Growth 'More Durable' Than Peers

Morgan Stanley: Axon Enterprise's Growth 'More Durable' Than Peers

Axon Enterprise Inc AAXN, best-known for providing its non-lethal Taser product and body camera equipment to law enforcement, boasts a growth profile that is "more durable" than its peers, according to Morgan Stanley.

The Axon Enterprise Analyst: James Faucette upgraded Axon from Equal-weight to Overweight with a price target lifted from $115 to $185.

The Axon Thesis: Axon deserves credit for "modernizing public safety," and recent U.S. Federal contract wins suggest the market is growing faster than expected, Fauette said in a Friday upgrade note.

The market may also be larger than previously thought, as demand for nonlethal weapons is growing at a time when public scrutiny around police practices is at its highest levels, the analyst said. 

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While Axon is not the only provider of nonlethal weapons, it has operated with "effectively no churn" over the years in both the Taser and body camera business units, he said.

This is likely due to management's focus on innovating better than its rivals and earning trust from customers, Faucette said. 

"We believe Axon is the most likely vendor law enforcement will rely on to answer calls for police reform and protect police actions in light of increasingly common episodes of civil unrest." 

Finally, Axon has many years of growth ahead, as revenue could rise from an estimate of $633 million in fiscal 2020 to $6 billion by 2035, according to Morgan Stanley. 

AAXN Price Action: Shares of Axon Enterprise were trading higher by 0.65% to $150.62 ahead of the close Friday. 

An Axon Taser. Courtesy photo. 

Posted In: James FaucetteMorgan StanleypoliceTASERAnalyst ColorUpgradesPrice TargetAnalyst Ratings