Please ensure Javascript is enabled for purposes of website accessibility

Why Axon Enterprise Inc's Shares Popped 24% Today

By Travis Hoium – May 9, 2018 at 11:29AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Growth is stronger than expected in body cameras and tasers in 2018.

What happened 

Shares of body camera and taser company Axon Enterprise Inc (AXON 1.35%) jumped as much as 24.3% in trading Wednesday after reporting first-quarter results. The gains showed no signs of giving way at 11:05 a.m. EDT with shares still up 22.1% on the day.

So what

Quarterly revenue jumped 28% to $101.2 million and bookings for software and sensors were a quarterly record of $98 million. Net income nearly tripled to $12.9 million, or $0.24 per share, as operating margin increased 660 basis points to 13.4% in the first quarter.

The outside of Axon Enterprise's headquarters.

Axon Enterprise's headquarters building. Image source: Axon Enterprise.

Wall Street's estimates were for just $91.3 million in revenue and earnings of $0.04 per share, so results easily cleared that bar. To add to the good news, management increased revenue growth guidance 200 basis points to 18%-20% and reaffirmed an expected 300 basis point to 400 basis point increase in operating margins for the year.

Details of the VIEVU acquisition from The Safariland Group were also released. Axon paid $4.6 million in cash and $2.5 million in stock for the company with a potential 141,000 shares to be paid contingent on milestones over the next two years, including minimum holster purchases by Safariland.

Now what

It's hard to find flaws in this earnings report and the strategy of selling hardware like tasers and body cameras with software like cloud storage and computer-aided dispatch software is paying off. Total software and sensors backlog now stands at $570 million and ensures years of recurring revenue for Axon Enterprise. Today's bounce is great for investors and I don't see anything but bright days ahead for this company. 

Travis Hoium owns shares of Axon Enterprise. The Motley Fool owns shares of and recommends Axon Enterprise. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Axon Enterprise Stock Quote
Axon Enterprise
$113.46 (1.35%) $1.51

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.