What happened

Shares of Axon Enterprise (NASDAQ:AXON) climbed 67.5% in 2019, according to data provided by S&P Global Market Intelligence, but investors had to stomach a good deal of volatility before it reached those highs. The company, formerly known as TASER International, has long been a target of skeptic bears, but by the end of 2019 Axon had gone a long way toward proving its bona fides as a growth stock.

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AAXN vs. S&P 500 data by YCharts

So what

Axon for years has been trying to pivot from simply offering nonlethal Taser weapons to law enforcement to a range of products and services including body cameras, cloud storage, and records management under brand names such as Evidence.com. The company charges upward of $199 per month per officer for those services, providing steady and recurring subscription services instead of one-time sales.

Axon reached its highs for the year after reporting third-quarter earnings in November, disclosing recurring revenue up 39% year over year to $141.5 million and software seats up 32% to 428,600. Axon's hope is that by locking local police forces into its ecosystem, including its evidence storage products, the company's products will be sticky and hard to swap out for a rival's.

Two police officers wearing body cameras chat with a citizen.

Image source: Axon Enterprise.

The company also increased full-year revenue guidance by $15 million to $500 million-$510 million.

The third-quarter results also helped ease investor concerns over a second-quarter miss that Axon said was due to about $6 million worth of Tasers and cartridges that couldn't be delivered because of production issues.

Now what

Axon started the new year off with more volatility, with shares falling more than 10% on Jan. 3 after the company filed suit against the U.S. Federal Trade Commission over FTC concerns about Axon's 2018 acquisition of body camera maker Vievu.

Distractions and volatility have become standard issue for Axon shareholders, but the potential for this business is undeniable, and the company still has a large, untapped market to grow into. If you can look past the drama, this is a stock with exciting long-term potential.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.