Key Takeaways
- Axon shares closed at $313 on Nov. 6, down 52% from their August high, after a third-quarter revenue miss and a guidance cut tied to about $130 million of delayed federal counter-drone deployments.
- Northland Securities cut its price target to $540 from $800 and kept its Outperform rating, a target 73% above that close.
- Analysts now expect $9.55 of normalized EPS in 2027, down from $10.51 on Oct. 22, and the stock traded at 36x forward earnings on Nov. 6, its lowest in five years.
- Northland’s $540 works out to 42x Axon’s 2028 estimate, against 33x for the Nov. 6 price on 2027, and fourth-quarter cash is the near-term test.
Axon Enterprise (AXON) closed at $313 on Nov. 6, down 18% on the day after its third-quarter report and 52% below its August high. Northland Securities analyst Michael Latimore cut his price target to $540 from $800 the same day and kept his Outperform rating. Even after the cut, $540 sits 73% above that close.
Three Federal Deals Slipped Out of 2026
The third quarter came up short. Revenue rose 28% to $909 million, below the roughly $937 million analysts expected. Axon also cut its 2026 growth outlook to about 30%, from 32% to 34%, because three federal Dedrone counter-drone deployments worth about $130 million won’t land this year. That puts 2026 revenue at $3.61 billion to $3.63 billion, against the $3.71 billion analysts expected going in.
Cash fell short too. Third-quarter free cash flow was an outflow of $19 million after about $100 million went into inventory, and Axon cut its full-year target to $350 million to $400 million, from $450 million.
Northland Kept Its Outperform Rating
Northland took about a third off its target but stayed positive. Barclays went lower, to $507 from $688, and kept its Overweight rating too.
I read the quarter the same way. Software & Services revenue grew 43% to $437 million, and future contracted bookings rose to $15.8 billion from $15.1 billion at the end of June. Neither number points to lost demand.
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Does $540 Add Up?
The Street’s average target fell from $822 in mid-November 2025 to $561 on Nov. 7.
Northland’s $540 sits just under that average, inside a range of $380 to $700.
Analysts expect normalized EPS of $7.15 in 2026, $9.55 in 2027 and $12.76 in 2028.
The 2027 figure was $10.51 on Oct. 22, and I’d expect it to stay lower until the federal deployments ship.
The stock traded at 36x forward earnings on Nov. 6, its lowest in five years and less than half its five-year average of 77x.
The reports on Northland’s cut don’t say how the firm valued Axon, so this is my own check. A 12-month target is a price for a year from now, so I set it against 2028 earnings and the Nov. 6 price against 2027. At $313, Axon trades at 33x its 2027 estimate. At $540, it would trade at 42x the 2028 estimate. Getting there takes both the forecast earnings growth and a higher multiple.
Northland Has Axon About Right
The risk is cash. Axon needs about $450 million of free cash flow in the fourth quarter alone to hit the middle of its new target, on top of about $720 million in cash committed to Skydio.
Still, $540 holds up if Axon earns the $12.76 of normalized EPS analysts expect for 2028 and investors pay about 42x for it, up from 33x on 2027 earnings at the Nov. 6 close. The next test comes in late February, when Axon reports the fourth quarter and gives its 2027 outlook. Before then, fourth-quarter free cash flow is the number that matters: anything well short of $450 million would make the timing case much harder to defend.
So What Is Axon Stock Actually Worth?
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