Key Takeaways
- Axon stock fell 18% to $313 on Nov. 6 after its third-quarter report, and Barclays cut its target to $507 from $688 while keeping its Overweight rating.
- Revenue grew 28%, but Axon pulled about $130 million of delayed federal counter-drone revenue from its 2026 outlook and cut its free cash flow target.
- On my math, $507 is about 37x 2028 earnings estimates, against about 30x 2027 estimates at today’s price.
- The case rests on the roughly $450 million of fourth-quarter free cash flow management expects.
Axon Enterprise (AXON) stock fell 18% to $313 on Nov. 6, the day after its third-quarter report, leaving it down about 45% this year. Barclays cut its price target the same day to $507 from $688.
It kept its Overweight rating, though, and $507 is 62% above Friday’s close.
Growth Without the Cash
Axon’s revenue has grown fast, but its cash hasn’t kept up. Free cash flow fell to $75.1 million in 2025 from $329.5 million in 2024, and it was negative $55.6 million in the first half of 2026. In September, Axon also sold $1.15 billion of convertible notes.
Then came a delay. Third-quarter revenue rose 28% to $909 million, short of the roughly $937 million analysts expected. Axon took about $130 million of revenue from three late federal Dedrone deployments out of its 2026 outlook, and lowered its 2026 free cash flow target to $350 million to $400 million, from $450 million.
What $507 Implies on Consensus Earnings
Barclays updated its model after the quarter, but the available report didn’t specify its valuation method, so this is my math. On TIKR’s consensus, $507 is about 37x the 2028 EPS estimate of $13.82, while today’s $313 is about 30x the 2027 estimate of $10.51.
On that basis, $507 needs both the forecast earnings growth and a higher multiple, from about 30x to 37x.
The Rest of the Quarter Held Up
Software and services revenue grew 43% to $437 million, annual recurring revenue rose 40% to $1.8 billion, and future contracted bookings reached $15.8 billion. On the Dedrone delays, CFO and COO Brittany Bagley said on the call, “we’re not seeing an underlying risk to demand or need for this product. It truly is just a timing piece.”
Barclays is already more careful than most of the Street. The consensus target fell from $870 on Nov. 5, 2025, to $680 on Oct. 29, and $507 sits about 25% below it, toward the low end of the $440-$830 range.
On next-12-month earnings, Axon traded at 48x on Nov. 2, near its five-year low of 43x and well under its 77x average. At $313, that’s about 35x on the same estimate.
TIKR Tracks 21 Analysts on Axon Enterprise. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Axon Enterprise, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Axon Enterprise’s Analyst Ratings
Axon’s Cash Has to Show Up
Free cash flow was an outflow of $19 million in the third quarter, including about $100 million put into inventory. Separately, Axon agreed to invest approximately $1.2 billion more in drone maker Skydio, about 60% in cash and 40% in Axon stock, with closings expected through the first quarter of 2027. Bagley expects about $450 million of free cash flow in the fourth quarter alone.
Barclays has this one about right. The target asks for earnings growth Axon has a contracted backlog to support, and analysts’ 2027 estimate barely moved in the 90 days to Nov. 6.
Axon reports its fourth quarter in February. If that quarter’s cash comes in well short of $450 million, I’d expect the stock to stay closer to $313 than to Barclays’ $507.
So What Is Axon Stock Actually Worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
