Axon Enterprise (AXON 9.50%) stock is getting hit with a sharp valuation pullback in Wednesday's trading. The company's share price was down 12.1% as of 11:15 a.m. ET, and had been off as much as 20.7% near the market open.
Axon published its third-quarter results yesterday afternoon, reporting sales that topped Wall Street's forecast but earnings that fell short of the average analyst target. Investors were also looking for stronger forward guidance.
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Axon stock sinks on Q3 earnings miss
Axon notched non-GAAP (generally accepted accounting principles) adjusted earnings per share of $1.17 on revenue of $710.64 million. While the company's revenue topped Wall Street's target by roughly $5.8 million, adjusted earnings per share came in $0.37 lighter than anticipated. Axon continued to post strong sales growth, with Q3 revenue increasing 30.6% year over year, but weaker-than-expected margins are prompting a big sell-off for the stock.
NASDAQ: AXON
Key Data Points
What's next for Axon?
Axon is guiding for Q4 revenue to come in between $750 and $755 million. With the target, the company is now guiding for full-year revenue of approximately $2.74 billion -- beating the average Wall Street analyst target for sales of $2.72 billion. On the other hand, the company's target for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) between $178 million and $182 million appears to have left investors underwhelmed.
With its Q3 report yesterday, Axon also announced that it will be acquiring Carbyne -- a public-safety tech specialist. Axon is paying $625 million to acquire the company, and the deal is expected to close in next year's first quarter.
