Axon Enterprise (NASDAQ:AAXN) has been one of the more volatile stocks on the market this year. The maker of law enforcement products like the Taser electroshock weapon, body cameras, and related gear surged through the first half of 2018, up more than 150% over the summer on two blowout earnings reports. However, since then, the stock has fallen alongside the broader sell-off in high-priced growth stocks, and after its third-quarter report in November showed sales growth slowing.

With the stock down more than 40% from its peak this summer, shares now appear to be selling at a steep discount, considering that nothing fundamental has changed about the company in those months. Below are seven reasons why I just bought more shares of Axon.

The top of a police cruiser

Image source: Getty Images.

1. An inherent need for security

Plenty of things will change in the business world over the next 10 or 20 years, and companies and industries will come and go, but the need for security is a human constant. Police and law-enforcement agencies -- Axon's customers -- will still be around, and will demand the best products available to help them do their jobs. Axon, the market leader in less-lethal conductive electrical weapons and body cameras, figures to have a role in that future.

2. Body cameras -- the way of the future

In today's political climate, with outrage over controversial police shootings and demands for criminal-justice reform, body cameras have become an obvious tool for law enforcement agencies and the criminal courts -- used to hold officers accountable, and to present evidence in cases in which there'd otherwise only be hearsay, or one person's story against another.

Body cameras aren't a perfect solution, but the technology will get better, which will help ensure the law is enforced in a more just manner. In October, Axon introduced its first LTE-connected camera, the Axon Body 3; the company also makes dashboard cameras, which provide similar benefits for highway stops or other incidents where a police cruiser is present. Through the first nine months of this year, product sales in its software and sensors segment, which is mostly made up of body and dashboard cameras, rose 33% to $50.8 million.

3. Exposure to the cloud

Axon does more than just make Tasers and cameras. The company also operates cloud-based digital management software, a database through Evidence.com, and similar tools. Like other cloud businesses, Axon Cloud has proven to be a high-margin business for the Taser maker, generating a gross margin of 73.9%. It's also growing quickly, with revenue in the segment up 47% in the most recent quarter.

4. Margins ramping up

Part of the reason that Axon stock surged over the first half of the year is that its margins have suddenly expanded this year as cloud revenue has ramped up, and the company has begun to see profits from its body cameras, which help drive adoption of its cloud tools. Gross margin in the most recent quarter jumped 750 basis points to 62.6%, and through the first three quarters of the year operating margin improved from 3.4% to 7.5%. As a result, earnings per share has more tripled from $0.14 to $0.47, a promising sign for future profit growth.

5. Competitive advantages

Axon's combination of body and dashboard-camera footage with its cloud-based storage database creates a powerful network of competitive advantages, as it locks customers into its system by creating switching costs and barriers to entry. Evidence.com also benefits from network effects -- it becomes a more powerful database as more law enforcement agencies upload data onto the website.

The new Taser 7

Image source: Axon Enterprise.

6. Investment in research and development

Through the first three quarters of the year, the company spent 23.3% of its revenue on research and development, a significantly higher percentage than most tech companies. That bodes well for future product launches, and Axon is continuously upgrading its product line and introducing new devices. In addition to the new LTE-connected Axon Body 3 camera, the company just came out with a new TASER 7, the first "ground-up redesign" of the weapon since its introduction in 1993, improving performance across several key metrics.

7. A long growth path ahead

All of the factors above convince me that Axon has a long growth path ahead of it. Its revenue growth of 16% in its most recent quarter may not make it look like a high-growth company, but its product line meets a timeless need, it's making smart investments, and it's building competitive advantages through its cloud network and cameras. All of that should help ensure double-digit growth for many years.

With the stock selling at a discount after the recent sell-off, now looks like a great time to buy.

Jeremy Bowman owns shares of Axon Enterprise. The Motley Fool owns shares of and recommends Axon Enterprise. The Motley Fool has a disclosure policy.