Axon, a deep dive

Axon, the maker of TASER devices, police body cameras and the software behind them, grew revenue 28% in its third quarter and still expects about 30% for the year. Its shares closed on Friday, November 6 at $313.00: 52% under the closing high of $645.72 on August 19, and 64% under the record $870.97 of August 2025. Market value has gone from about $52 billion to about $25 billion since August.

So the business is still growing fast, and the stock has halved. The rest of this post goes through it in order: the trend, twenty years of falls, revenue and margin, the earnings record and the outlook, the price against sales, and the news.

In this chart: Axon · Motorola Solutions · XLI · SPY

Since August 19 Axon is −52%. Over the same days Motorola Solutions, its main rival in body cameras and police software, is +7%, the industrials fund XLI −11% and the S&P 500 fund SPY −4%.

The trend

Axon closed 34% under its 200-day average ($473), where it has been since September 9, and 29% under its 50-day average ($442). The 50-day crossed under the 200-day on October 23. The 14-day RSI is 24, under 30. It was the lowest close since August 2024. The screener’s Signal reads Very Weak; the rule that fired is Breakdown (early): the price well under its 200-day average, 52% down from the August high and still falling. The Signal is a reading of the trend, not an instruction.

The last two days did much of it. On Thursday, November 5 the whole market fell (SPY −4.4%, the Nasdaq 100 fund QQQ −6.5%) and Axon fell 9.8% before it reported. Its results came after the close. On Friday the market rose (SPY +0.3%) and Axon fell 18.2%.

Twenty years of falls

On closing prices, Axon (called TASER International until 2017) has fallen 35% or more from a high 7 times since 2006. This one, −64% from the record close of $870.97 on August 7, 2025, is the second deepest; only 2007–2008 went further, −86%. Each of the 6 before was made back in full: the quickest 2 months after the low (March 2020), the slowest 5.3 years (November 2008). Against its 52-week high, $645.72 on August 19, it is −52%. That is a record of what happened, not a forecast of what will.

Revenue and margin

Revenue was $2.78 billion in 2025, up 33%, and has grown more than 25% every year since 2019. On November 5 Axon lowered its 2026 range to $3.61 billion–$3.63 billion, from $3.67 billion–$3.725 billion; analysts had expected $3.71 billion. Before the report they expected $4.80 billion for 2027, as TIKR quoted them; that estimate predates the cut. For the fourth quarter Axon guided $990 million to $1.01 billion, against about $1.06–1.07 billion expected.

The gross margin was 56.7% in the third quarter, from 60.1% a year earlier, the lowest since the first quarter of 2024. Axon named three causes: more counter-drone equipment in the mix, higher memory chip prices and new product lines still scaling, and it expects memory costs to weigh through 2027 and 2028. The other side of that trade is Micron, in Micron, a deep dive.

Where it grew: software and services +43% to $437 million, now 48% of revenue, with annual recurring revenue up 40% to about $1.75 billion. Platform solutions (drones, counter-drone gear, in-car video) doubled from a year earlier; body cameras grew 6%; TASER fell 2%.

Earnings and the outlook

In 10 of the last 12 reports, earnings per share as the company states them before one-off items came in above the analysts’ average estimate. The two below were the third quarter of 2025 ($1.17 against $1.54) and the latest, on November 5: $1.72 against $1.90, −9.5%. Revenue, $908.6 million, was also under the $931 million Zacks quoted.

The outlook mattered more. For two years Axon set a full-year range in February and raised it at the next reports: 2024 began at 22% growth and finished at 33%; 2025 began at 25% and finished at 33%. 2026 began at 28.5% and was raised to 33% in August. On November 5 it came down to about 30%: three federal deployments of Dedrone, its counter-drone business, worth about $130 million, moved out of the year. President Josh Isner said procurement approvals, installation and scheduling made the timing uncertain; asked on the call, management said it was timing, not weaker demand.

Axon reports after the close, so the next day carries the reaction. Over the last twelve reports, 8 were followed by a rise. The last two are the two largest falls of the twelve: −14.3% in August and −18.2% on Friday.

The price

Axon reports little GAAP profit, so price against sales says more than a P/E. On the last four quarters’ revenue it trades at 7.7 times sales. At the peak, in June 2025, it was 29.4 times; the five-year median is 13.2 times and the five-year low 6.7 times, in June 2022.

On earnings: before the report TIKR quoted analysts’ estimates of $7.64 a share for 2026 and $10.51 for 2027, and put Axon at about 48 times forward earnings on November 2, against a five-year average of about 77. At Friday’s close that is 41 times the 2026 estimate and 30 times the 2027 one; both estimates predate the cut and may come down.

The news

An AI model reads each article about Axon and scores its tone from −1 to +1. Friday’s average was −0.33, the lowest of any day since we began on October 16; the previous low was −0.30 on October 17. The reasons the articles gave for the fall: revenue and earnings below estimates, the outlook cut tied to the delayed federal deployments, a lower free cash flow target, narrower margins, and the Skydio deal. Those are the articles’ explanations, not ours.

Also worth knowing

The cash. Free cash flow in the quarter was −$19 million, after about $100 million went into inventory, mostly counter-drone equipment, as a guard against supply problems. Axon cut its target for the year to $350–400 million from $450 million. The first nine months came to −$75 million, so the fourth quarter needs $425–475 million; its best quarter so far was $225 million (Q4 2024).

The Skydio deal. Alongside the results Axon said it would put $1.2 billion, in cash and its own shares, into Skydio, the US drone maker, at a $5.2 billion valuation before the money. That takes Axon to about 37% of Skydio and makes it Skydio’s only distributor to public-safety agencies in the US and Canada. A TIKR article read it as an answer to Motorola, which has just bought D-Fend, a counter-drone company.

Body 5. Axon Body 5, a new camera, reaches customers in spring 2027; the company said on the call that agencies could hold back buying in the first quarter while they wait for it.

What this is, and is not

A record of where Axon stands after a hard week, measured the same way the screener measures every stock: a business still growing about 30% a year, a first cut to its outlook after two years of raising it, and a share price that has halved since August. None of it says what comes next; the delayed deployments, the fourth quarter’s cash and the next report in late February will say more. Every figure here is on Axon’s page.