Key Takeaways
- Axon Enterprise reports third-quarter results after the close on Nov. 5, and analysts expect its revenue to grow about 33% this year and about 29% in 2027.
- Demand looks solid. But free cash flow was negative in the first half, so Axon needs about $506 million in the second half to hit its $450 million target for the year.
- Tyler Technologies just turned healthy public-sector demand into record free cash flow, and Motorola Solutions reports a day before Axon.
- At 48x forward earnings, Axon trades well below its five-year average but far above Motorola and Tyler at about 27x, so cuts to the 2027 estimates would hurt.
Axon Enterprise (AXON) reports third-quarter results after the close on Thursday, Nov. 5. It’s being pitched to investors as a stock to own for 2027.
That’s the right way to look at it. Axon trades at 48x forward earnings, so its price rests on next year’s numbers. And this is the last big update before analysts set those estimates for the new year.
Two companies that sell into the same police and government budgets report around the same time. Tyler Technologies (TYL), which sells software to state and local governments, reported a strong quarter on Oct. 28. Motorola Solutions (MSI), Axon’s biggest rival in body cameras and police software, reports after the close on Wednesday, a day before Axon.
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
The growth is already in the estimates
Analysts expect Axon’s revenue to climb from $2.78 billion in 2025 to $3.71 billion this year, then to $4.80 billion in 2027.
That’s about 33% growth this year, inside management’s guidance of 32% to 34%. Management has raised that guidance twice in 2026. Next year’s estimate adds about 29% more. Earnings are expected to grow faster: consensus EPS goes from $7.64 this year to $10.51 in 2027, a 38% jump. That jump is what investors are paying for.
For the quarter itself, analysts expect roughly $937 million of revenue, up from $904 million in the second quarter. Axon’s revenue has grown more than 30% for ten straight quarters, and future contracted bookings reached $15.1 billion at June 30, up 41%.
The cash has to catch up
Axon ships TASER devices and cameras up front, then bills agencies over multi-year contracts. So its cash comes in well after its revenue, and free cash flow has swung from quarter to quarter over the last two years:
Free cash flow for the first half of 2026 was negative $55.6 million. Management still targets about $450 million for the full year, so Axon needs about $506 million in the second half. Last year’s second half produced $189 million, and only $33.4 million of that came in the third quarter.
If this third quarter matches last year’s, Axon would need more than $470 million in the fourth quarter alone. That’s more than double its best quarter on the chart. So Thursday’s free cash flow figure is the first real check on the target. The bull case is that the money is already there on paper: at June 30, Axon had $1.05 billion of contract assets, revenue it has earned but hasn’t billed yet.
Tyler shows what it looks like when growth turns into cash. Its third-quarter SaaS revenue grew 21.2%, and free cash flow hit a quarterly record of $277.0 million, up 11.9%. “Strong SaaS bookings reinforce healthy public sector demand,” Lynn Moore, Tyler’s executive chair, president and CEO, said in its third-quarter release. That’s a good sign for the budgets Axon sells into. Now Axon has to show it can turn the same demand into cash.
Motorola goes first
Motorola reports a day before Axon, so its numbers are the closest thing to a preview. In August, it raised its full-year revenue outlook to about $12.975 billion after second-quarter sales grew 13% and backlog hit a record $15.6 billion. But it guided for only about 8% growth in the third quarter. Its video security results and what it says about backlog should show whether police agencies are still spending at the pace Axon’s estimates assume.
Motorola also flagged higher memory costs in August, and Axon’s management has said those costs will show up in its own third-quarter margin. And Motorola agreed to buy counter-drone company D-Fend Solutions for $1.5 billion. That puts it straight into the market of Axon’s Dedrone, part of a Platform Solutions line that grew 122.6% to $149.8 million in the second quarter.
Cheap next to its past, pricey next to its peers
Axon’s forward P/E has come down a long way over the past five years:
At 48x on Nov. 2, it’s far below its five-year average of 77x and its August 2025 peak of 131x, and not far above the 43x low it hit on Oct. 19. But Motorola and Tyler both trade at about 27x. The market has already marked Axon down over its cash, and it still pays a premium for the growth.
The stock could also move on things the revenue and cash figures won’t show. Gross bookings grew only 20% in the second quarter, so soft commentary on bookings or AI adoption could sink the stock even on a clean beat.
Revenue has been the easy part for Axon. If it posts free cash flow well above last year’s third quarter and stands by its $450 million target, 48x looks reasonable for a company analysts expect to grow earnings 38% next year, and the 2027 estimates should hold. If the cash comes in light again, I’d expect those estimates to get trimmed, and the premium over Motorola and Tyler to shrink with them.
Of course, we won’t know whether Axon hit $450 million until it reports its fourth quarter in late February.
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!
