Axon (AXON 2.96%) didn't intend to be in the spotlight in 2020, but that's the way things played out. Policing in the United States has been a hot-button issue this year, with several high-profile incidents and nationwide protests that have lasted for months. Body cameras have been not only a central tool driving that public discussion, but also one of the solutions being demanded by a concerned public. 

All of this puts Axon in a strong position to continue to grow its business long-term. But is this growth stock still a buy after already climbing 71% in 2020? 

Axon's core is better than ever

A decade ago, Axon was known primarily for its Taser products and was considered a small -- but profitable -- business. Over the last few years, it added body cams, vehicle cams, digital evidence management, and analytics to its repertoire and become a full-service provider for law enforcement agencies around the world. 

Police officer with Axon products on.

Image source: Axon.

The core products are Tasers and body cameras, but it's the software services around those products that make Axon so attractive as an investment. Between 2016 and 2019, Axon Cloud has grown from $29 million in revenue to $130 million in revenue annually, and this is a business that can generate margins in excess of 70%. 

Axon has been able to integrate physical devices like Tasers, body cameras, and vehicle cameras into one cohesive package with a profitable cloud offering. Not only is there data storage, but now Axon can offer law enforcement a records product, dispatch services, and even artificial intelligence capabilities. These add value and make the hardware business very sticky for customers. And Axon is just beginning to tap its potential in the law enforcement market. 

Growing into a huge market

In 2019 Axon generated $531 million in revenue, and in the first three quarters of 2020 revenue was $454.9 million -- but that may be scratching the surface of the company's potential. Management estimates that its product lines have a $27 billion total addressable market, and the scope of the business continues to grow each year as the business expands.

In that sense, Axon has a long growth runway ahead, and investors should keep that in mind when trying to value the stock. 

Expensive but worth it

By most traditional measures, Axon's stock is very expensive. The price-to-sales ratio is already over 12, and since Axon isn't profitable its price-to-earnings ratio is negative. But you can see that the company is growing by double-digit percentages each year, and that could continue for more than a decade given its addressable market. 

AAXN Revenue (TTM) Chart

AAXN Revenue (TTM) data by YCharts

I think Axon still has a lot of growth ahead, and when it begins to generate a positive net margin the bottom line will improve rapidly. I think this is still a stock to buy, and given the focus on law enforcement around the world, the incentives to buy Axon's products are only going to increase.