Axon has gotten torched over the last six months - since October 2025, its stock price has dropped 44.3% to $399.38 per share. This may have investors wondering how to approach the situation.
Following the drawdown, is now the time to buy AXON? Find out in our full research report, it’s free.
Why Are We Positive On Axon?
Providing body cameras and tasers for first responders, AXON (NASDAQ: AXON) develops technology solutions and weapons products for military, law enforcement, and civilians.
1. ARR Surges as Recurring Revenue Flows In
Investors interested in Law Enforcement Suppliers companies should track ARR (annual recurring revenue) in addition to reported revenue. This metric shows how much Axon expects to collect from its existing customer base in the next 12 months, giving visibility into its future revenue streams.
Axon’s ARR punched in at $1.35 billion in the latest quarter, and over the last two years, its year-on-year growth averaged 39.4%. This performance was fantastic and shows that customers are willing to take multi-year bets on the company’s product offerings. Its growth also makes Axon a more predictable business, a tailwind for its valuation as investors typically prefer businesses with recurring revenue. 
2. Operating Margin Rising, Profits Up
Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.
Axon’s operating margin rose by 17.2 percentage points over the last five years, as its sales growth gave it immense operating leverage. Although its operating margin for the trailing 12 months was negative 2.2%, we’re confident it can one day reach sustainable profitability.
3. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Axon’s astounding 30.8% annual EPS growth over the last five years aligns with its revenue performance. This tells us its incremental sales were profitable.
Final Judgment
These are just a few reasons why we're bullish on Axon. After the recent drawdown, the stock trades at 52.2× forward P/E (or $399.38 per share). Is now the right time to buy? See for yourself in our full research report, it’s free.
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