Key Stats for Axon Stock
- Past-Week Performance: -13.6%
- 52-Week Range: $396.4 to $885.9
- Current Price: $496.2
What Happened?
Axon Enterprise (AXON), a public safety technology company selling body cameras, AI software, and TASER devices to law enforcement and governments worldwide, shed 13.6% in the week of March 8 through 12 despite carrying $14.4 billion in future contracted bookings, pushing shares to $496.18 and 44% below their 52-week high of $885.92.
On February 25, Axon shares surged 19% after Q4 2025 adjusted EPS of $2.15 crushed the $1.60 consensus estimate, with revenue of $796.7 million beating the $755.2 million Street estimate on 40% software growth and a record $7.4 billion in full-year bookings.
The week of March 8 through 12 reversed nearly the entire post-earnings gain, a move consistent with broader technology multiple compression rather than any deterioration in Axon’s business, given full-year 2026 revenue guidance of 27% to 30% growth remains the strongest opening outlook in the company’s history.
Joshua Isner, President, stated on the Q4 2025 earnings call that “we just booked almost as much business in the quarter as we did in the full year just 2 years ago, and we see no sign of that slowing down,” anchoring the case that the bookings acceleration driving the February 25 surge remains structurally intact despite the subsequent selloff.
With the Axon Body Mini, a lightweight body camera targeting commercial enterprises, launching mid-2026, the AI Era Plan subscription bundle generating $750 million in first-year bookings, and a 2028 revenue target of $6 billion requiring only a continuation of the current growth rate, the business case that drove the 19% earnings pop has not changed.
Wall Street’s Take on AXON Stock
The 13.6% selloff in the week of March 8 through 12 punishes Axon for a 2025 free cash flow trough of $0.08 billion, yet consensus already estimates a 509.7% FCF rebound to $0.46 billion in 2026, driven by the normalization of strategic inventory investments that Bagley confirmed on the Q4 2025 earnings call were a deliberate one-year event.
Revenue growing from $2.8 billion in 2025 to an estimated $3.6 billion in 2026 and $4.6 billion in 2027 supports that FCF recovery, with EBITDA margins holding at 25.5% in 2026 before expanding to 26.9% in 2027, anchored by the AI Era Plan subscription bundle which generated $750 million in first-year bookings and carries structurally higher margins than hardware.
Regardless, Wall Street stands firmly behind the business through the selloff: 10 analysts rate AXON a buy, 8 an outperform, and only 2 a hold, with a mean price target of $735.01 implying 48.1% upside from the March 13 close of $496.18, with consensus anchoring that target to the Axon Body Mini launch and AI Era Plan expansion scaling through 2026.
Bears anchor to the $521.24 low target, pricing the risk that tariff headwinds and memory cost inflation compress the 61.1% adjusted gross margin further in 2026, while bulls push to $950.00 pricing the full $14.4 billion future contracted bookings backlog converting at the stated 20%-25% annual rate through 2028’s $6 billion revenue target.
What Does the Valuation Model Say?
According to the TIKR mid-case valuation model, AXON carries a target price of $1,646.20, implying 231.8% total return from current levels at a 28.3% annualized IRR through December 2030, driven by a 27.1% revenue CAGR assumption and net income margins recovering from 20.3% in 2025 to 20.0% in 2026 before expanding to 20.7% by 2028.
The model’s FCF margin expansion from 2.7% in 2025 to 12.8% in 2026 is the key lever, and Bagley’s explicit guidance that 2025 FCF conversion was a deliberate low point directly validates that assumption.
The market prices AXON at roughly 72x 2026 estimated EPS of $6.85, a multiple that looks punishing until you account for 125% net revenue retention, meaning existing customers are already buying more every year without a single new sales dollar spent.
The operational signal that this selloff is multiple compression rather than fundamental deterioration is the $14.4 billion future contracted bookings balance, up 43% year-over-year, which generates visible revenue before a single new deal closes.
The primary risk to the TIKR model’s 27.1% revenue CAGR is the adjusted gross margin, which already compressed to 49.3% in connected devices in Q4 2025 due to tariffs and Platform Solutions mix; further tariff escalation beyond the 15% global rate Axon has baked into guidance breaks the margin expansion trajectory that underpins the $1,646.20 target.
The number to watch in Q1 2026 results is free cash flow conversion on adjusted EBITDA: any reading approaching the company’s stated 60% long-term target confirms the 2025 trough thesis and directly validates the 509.7% FCF recovery estimate that the TIKR model’s mid-case is built on.
Should You Invest in Axon Enterprise, Inc.?
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