Axon Enterprise (AXON +9.83%) shares have advanced 2,000% over the past decade. But every Wall Street analyst covering the company thinks the stock is deeply undervalued at its current price of $405 per share.
- The most bearish forecast comes from Andrew Spinola at UBS. In February, he reiterated his target of $570 per share, implying 40% upside from the current price.
- The most bullish forecast comes from Andrew Sherman at TD Cowen. In April, he reiterated his target of $825 per share, implying 103% upside from the current price.
Axon has not performed as well as Nvidia and Palantir in recent years, but the company is integrating artificial intelligence into its product ecosystem, and it has a large addressable market that leaves plenty of upside.
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Axon is bringing AI capabilities to its industry-leading public safety products
Axon develops public safety technologies for law enforcement, enterprises, and government agencies. Its hardware portfolio includes conducted energy weapons (Tasers), body-worn cameras, and in-car cameras. Its software portfolio includes products for digital evidence management, records management, dispatch, and real-time operations.
Axon is the market leader in Tasers, body-worn cameras, and digital evidence management software, and the company is reinforcing its leadership position by developing adjacent artificial intelligence (AI) products.
In 2024, Axon introduced Draft One, generative AI software that automates report writing. It uses audio from body-worn cameras to draft high-quality narratives, thereby reducing how much time police officers spend on paperwork. Customers adopted Draft One faster than any software product in company history, according to management.
In 2025, the company introduced Axon Assistant, a generative AI product that lets users query evidence, reports, and agency data in natural language. It also supports real-time translation. Axon Assistant currently works with Axon's body cameras and digital evidence management system, but will eventually integrate with more products.
NASDAQ: AXON
Key Data Points
Axon has hardly scratched its $159 billion total addressable market
Axon reported strong fourth-quarter financial results that crushed estimates on the top and bottom lines. Revenue increased 39% to $797 million, driven by strong sales growth across its hardware and software businesses, and non-GAAP earnings increased 84% to $2.15 per diluted share.
Meanwhile, bookings (contracted sales not yet recognized) increased 43% to $14.4 billion, which hints at strong growth in the quarters ahead. Indeed, management expects revenue to increase at roughly 29% annually to reach $6 billion by 2028. Additionally, the company values its total addressable market at $159 billion, and sees a particularly large opportunity to win enterprise customers.
Wall Street estimates Axon's adjusted earnings will increase at 24% annually through 2027. That makes the current valuation of 59 times adjusted earnings look tolerable. Axon may not deliver triple digit returns in the next year, but I think patient investors should consider buying a small position today. Indeed, among 23 analysts that cover the company, the stock has a median target of $700 per share. That implies 72% upside from its current share price of $405.
