Key Stats for Axon Stock
- Wednesday’s Performance: 6%
- 52-Week Range: $339 to $792
- Valuation Model Target Price: Around $706
- Implied Upside: 56%
Analyze your favorite stocks like Axon Enterprise with TIKR (It’s free) >>>
What Happened?
Axon Enterprise stock rebounded about 6% to $468 per share on Wednesday, one session after plunging nearly 10% to $442 following the announcement of a $1 billion offering of 0% convertible senior notes due 2031. Shares then fell about 3% to $454 on Thursday, leaving investors to weigh Axon’s strong operating momentum against concerns around dilution, cash generation, and capital deployment. The financing-driven volatility has become the central short-term debate around a company that is still growing revenue above 30%.
Axon stock rose Wednesday as investors reassessed the financing after Tuesday’s sharp selloff, weighing the benefit of raising $1 billion at 0% interest against the potential for future dilution. Axon expects roughly $986 million of net proceeds, with about $100 million going toward capped-call transactions designed to reduce potential dilution if the notes convert, while the remaining capital can support operations, acquisitions, and investment. The deal gives Axon substantial funding without regular cash interest expense, but it also raises the bar for management to turn that capital into stronger earnings and free cash flow.
This week, CFO and COO Brittany Bagley said Axon remains confident in its raised 32% to 34% full-year revenue growth outlook, supported by visibility from contracted business and deals expected to close before year-end. Five-year normalized bookings grew more than 30% in Q2, while enterprise and international bookings each roughly tripled year over year, and counter-drone quarterly revenue surpassed $100 million. Bagley said, “we really expect Q4 to be the quarter where you see some really attractive growth,” with management expecting Q4 to deliver Axon’s highest growth rate of 2026.
Wall Street has remained constructive despite the financing volatility. TD Cowen reiterated its Buy rating and $825 price target on September 10, while Argus raised its target from $460 to $600, Needham maintained a $750 target, Goldman Sachs maintained a $715 target, Morgan Stanley lifted its target from $600 to $640, and Piper Sandler increased its target from $724 to $732. Axon also competes with Motorola Solutions across public-safety hardware and software, while Flock Safety and Genetec overlap in real-time operations and video security. Axon’s Q2 revenue grew 35% to $904 million, compared with 13% revenue growth at Motorola Solutions, whose Software and Services sales increased 10%, highlighting Axon’s faster expansion as recurring software becomes a larger part of its platform.
Value Axon Enterprise instantly (Free with TIKR) >>>
Is Axon Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): around 31%
- Operating Margins: around 10%
- Exit P/E Multiple: around 44x
Axon’s 31% revenue-growth assumption is demanding, but current operating momentum gives it some support. Management expects 32% to 34% revenue growth in 2026, future contracted bookings reached $15.1 billion, and Axon expects to fulfill roughly 20% to 25% of that balance over the next 12 months. The company also has several ways to expand customer spending across TASER devices, body cameras, digital-evidence software, AI tools, 911 communications, and counter-drone systems.
Recurring software remains one of the strongest growth levers. Annual recurring revenue reached $1.6 billion, up 39%, while net revenue retention of 126% shows that existing customers continue increasing spending as they adopt more products across Axon’s ecosystem. The AI Era Plan adds recurring software on top of Axon’s hardware base through products such as automated report writing, transcription, and translation, giving the company another way to increase revenue per customer.
See analysts’ growth forecasts and price targets for Axon Enterprise (It’s free) >>>
The EBIT chart strengthens the profitability case. Consensus estimates point to EBIT rising from around $190 million in 2026 to around $500 million in 2027 and around $840 million in 2028, while the EBIT margin is expected to reach around 10% in 2027. That makes the model’s roughly 10% operating-margin assumption more defensible, while still requiring Axon to convert rapid growth into substantially stronger operating profits.
That margin expansion matters because Axon’s next phase of value creation depends on more than revenue growth alone. Management said software gross margins remain above 80%, so continued growth in higher-margin software could offset the costs of scaling newer hardware businesses such as counter-drone systems and improve the company’s overall profitability.
Based on a model target of around $706 and Thursday’s closing price of about $454, the model points to roughly 56% upside. That upside depends on Axon sustaining around 30% revenue growth, improving profitability, and supporting a premium 44x exit P/E, so the valuation looks attractive only if the company continues executing at an unusually high level. Q4 deal conversion, recurring software and AI adoption, international expansion, and stronger cash generation remain the most important business drivers through the rest of 2026.
How Much Upside Does Axon Stock Have From Here?
Investors can estimate Axon’s potential share price, or what any stock could be worth, in under a minute using TIKR’s New Valuation Model tool.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
Value Axon Enterprise in under 60 seconds with TIKR (It’s free) >>>
