Delivering gains on the stock market year in and year out isn't easy.
Most stocks are subject to the same cyclical and macroeconomic forces that affect the broad market, and major indexes like the S&P 500 have losing years from time to time. On average, the S&P 500 falls about once in every four years.
From 2016-2024, the S&P 500 had two losing years, in 2018 and 2022, but Axon Enterprise (AXON 1.32%) was the rare stock that generated a positive return in every one of those nine years.
It was a remarkable streak for the TASER maker and law enforcement technology company that saw it expand beyond its core in electrical weapons to an array of body and dashboard cameras as well as complementary software to help law enforcement agencies manage things like evidence, records, and prosecutions.
From the end of 2015 to 2024, the stock jumped a whopping 3,340% with a surge coming at the end of 2024 as the chart below shows.
That jump in late 2024 may have contributed to the end of the streak the following year as Axon stock fell by 4% in 2025 even after it spent much of the year in positive territory, up by more than 40% at one point. The 4% decline compared to a 16% gain in the S&P 500, making it the first time it underperformed the S&P 500 since 2017.
So was 2025 just an anomaly for Axon? Can the law enforcement tech stock get back on track this year? Let's take a look at what to expect from the company in 2026.
Image source: Axon.
Where Axon is today
Axon's slump last year had more to do with its lofty valuation coming into 2025 after the stock doubled in the second half of 2024, rather than any particular flaws with the business. In fact, Axon has delivered one of the strongest revenue growth streaks in its history, with revenue growth above 30% in the last seven quarters and in 14 of the last 15 quarters.
However, the stock's growth was hampered by multiple expansion as its price-to-sales ratio jumped from just 4 a decade ago to 19 today. In the third quarter, the company raised its full-year revenue guidance for 2025 to $2.74 billion, reflecting 31% annual growth.
While the valuation may continue to put a headwind on the stock, there are a number of growth catalysts in the company's favor that should drive its success over the coming years.
First, it's made a number of acquisitions to expand its reach and help fill in its product portfolio. It acquired Prepared and Carbyne, two complementary platforms, that enabled its launch of Axon 911, which uses AI technology to enable a faster response, improve efficiency, and move to a future where all relevant parties are connected to an emergency call in real-time. Axon said those acquisitions expanded the company's total addressable market by $5 billion to $159 billion.
Axon is also leveraging AI in other ways, including through a generative AI product called Draft One that writes first drafts of police reports by taking footage from body cameras, freeing up officers to spend their time on areas where they can better add value.
These new products further reinforce Axon's competitive advantages as a one-stop shop for law enforcement needs, and that should fuel its growth for the years ahead.
The company has begun expanding the market for its body cameras, making its largest sale ever in 2024 to a package delivery company for its frontline workers.
NASDAQ: AXON
Key Data Points
Can Axon bounce back?
As a business, Axon looks to be as healthy as it's ever been, and last year's pullback seems to be more driven by valuation than anything else.
The company has played the long game effectively, and it continues to make strategic moves to pave the way to long-term growth. Axon looks like a good bet to get back to its winning ways this year and to continue outperforming over the long term.
