Core Viewpoint - The article discusses the investment position of Parkev Tatevosian, CFA, and mentions the involvement of The Motley Fool with Axon Enterprise, highlighting the potential for financial compensation through affiliate links [1] Group 1 - Parkev Tatevosian has no position in any of the stocks mentioned [1] - The Motley Fool has positions in and recommends Axon Enterprise [1] - Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services [1]

Tariffs and the threat trade wars pose on the global economy are weighing on the markets right now. How long this will last and how devastating the impact will be on businesses has many investors hitting the panic button. There could, however, be some good, relatively safe stocks to buy amid all this turmoil. Three investments you may want to consider loading up on right now are Alibaba Group Holdings (BABA 0.88%), Visa (V -1.29%), and Axon Enterprise (AXON -4.18%). Here's why I think these stocks can outpe ...

Core Viewpoint - Axon Enterprise, Inc. has entered into privately negotiated exchange agreements to exchange approximately $407.5 million of its 0.50% convertible senior notes due 2027 for cash and common stock, with an expected issuance of about 1.0 million shares based on a projected stock price of $499.31 during the averaging period [1][2]. Group 1: Exchange Agreements - Axon will exchange approximately $407.5 million aggregate principal amount of its convertible senior notes for cash and shares of common stock [1]. - The exchange consideration will include the principal amount and accrued interest on the notes being exchanged [1]. - Following the exchanges, Axon will have approximately $282.5 million aggregate principal amount of notes outstanding [1]. Group 2: Market Impact - Hedged holders of the notes may unwind their hedge positions by purchasing Axon's common stock, which could significantly impact the market price of the stock [2]. - The amount of common stock purchased by hedged holders may be substantial compared to Axon's historic average daily trading volume [2]. - Axon cannot predict the magnitude of market activity or its overall effect on the stock price [2]. Group 3: Company Overview - Axon is a technology leader in global public safety, aiming to reduce gun-related deaths between police and the public by 50% before 2033 [4]. - The company integrates a suite of hardware devices and cloud software solutions for modern policing, including TASER devices, body cameras, and digital evidence management solutions [4]. - Axon's customer base includes various law enforcement agencies, fire services, corrections, emergency medical services, and enterprises [4].

Core Viewpoint - Axon has successfully priced a total of $1,750.0 million in Senior Notes, with the proceeds intended for general corporate purposes, including potential repurchases of existing convertible notes and funding growth initiatives [1][3]. Group 1: Offering Details - Axon priced $1,000.0 million of Senior Notes due 2030 and $750.0 million of Senior Notes due 2033, both at an issue price of 100% [1]. - The total offering size was increased from a previously announced $1,500.0 million [1]. - The sale of the Notes is expected to close on March 11, 2025, subject to customary closing conditions [1]. Group 2: Interest Rates and Maturity - The 2030 Notes will have an interest rate of 6.125% per year, payable semiannually starting September 15, 2025, and maturing on March 15, 2030 [3]. - The 2033 Notes will bear an interest rate of 6.250% per year, also payable semiannually starting September 15, 2025, and maturing on March 15, 2033 [3]. Group 3: Use of Proceeds - The net proceeds from the offering will be used for general corporate purposes, which may include repurchasing or redeeming existing convertible notes and supporting growth through acquisitions or investments in new products and technologies [1]. Group 4: Notes Characteristics - The Notes will be general senior unsecured obligations of Axon, with no guarantees from its subsidiaries at the issue date [2]. - Future domestic securities that guarantee Axon's existing revolving credit facility will guarantee the Notes, subject to certain exceptions [2]. Group 5: Company Overview - Axon is a technology leader in global public safety, aiming to reduce gun-related deaths by 50% before 2033 [6]. - The company integrates hardware devices and cloud software solutions to modernize policing, serving a diverse customer base including law enforcement and emergency services [6].

Core Viewpoint - Axon Enterprise, Inc. plans to offer $1,500 million in senior notes to support general corporate purposes, including potential repurchase of existing convertible notes and funding growth initiatives [1][5] Group 1: Offering Details - The offering will consist of senior notes due in 2030 and 2033, which will be general senior unsecured obligations of Axon [2] - The notes will be offered to qualified institutional buyers and non-U.S. persons, exempt from registration under the Securities Act [3] Group 2: Use of Proceeds - Net proceeds from the offering are intended for general corporate purposes, which may include repurchasing existing convertible notes and investing in product lines and technologies [1][5] Group 3: Company Overview - Axon is a technology leader in global public safety, aiming to reduce gun-related deaths by 50% by 2033 through integrated hardware and software solutions [5]

Core Insights - The article discusses the positions held by Travis Hoium in Axon Enterprise and mentions that The Motley Fool has positions in and recommends Axon Enterprise [1] Company Insights - Axon Enterprise is highlighted as a company of interest due to its association with Travis Hoium and The Motley Fool, indicating potential investment relevance [1]

Financial Performance - Net sales increased to $2,082,526 thousand in 2024, up 33.3% from $1,560,699 thousand in 2023[369]. - Net income for 2024 reached $377,034 thousand, representing a 114.1% increase compared to $175,783 thousand in 2023[369]. - Gross margin improved to $1,241,380 thousand in 2024, up from $955,453 thousand in 2023, indicating a significant increase in profitability[369]. - Research and development expenses rose to $441,593 thousand in 2024, a 45.5% increase from $303,719 thousand in 2023, reflecting the company's commitment to innovation[369]. - Total assets grew to $4,474,588 thousand in 2024, compared to $3,409,174 thousand in 2023, marking a 31.2% increase[366]. - Total liabilities increased to $2,146,923 thousand in 2024, up from $1,793,409 thousand in 2023, indicating a rise of 19.7%[366]. - Retained earnings surged to $812,014 thousand in 2024, compared to $434,980 thousand in 2023, showing a growth of 86.5%[366]. - The company reported a basic net income per share of $4.98 in 2024, up from $2.37 in 2023, reflecting a 110.5% increase[369]. - Cash and cash equivalents decreased to $454,844 thousand in 2024 from $598,545 thousand in 2023, a decline of 24.1%[366]. - The company reported a net cash used in investing activities of $(490,573) in 2024, compared to a net cash provided of $12,476 in 2023[374]. - Stock-based compensation increased significantly to $382,604 in 2024 from $131,358 in 2023, marking a 191% increase[374]. - The company reported a loss on strategic investments and marketable securities of $(283,217) in 2024, compared to a gain of $41,785 in 2023[374]. - Net cash provided by operating activities increased to $408,312 in 2024 from $189,263 in 2023, a growth of 116%[374]. Revenue Recognition and Contracts - The company recognizes revenue from two primary sources: product sales and subscriptions to the Axon Evidence SaaS offering[410]. - The company applies the five-step revenue recognition model outlined in ASC 606 for contracts with multiple performance obligations[411]. - Contract assets increased by $116.2 million, or 31.3%, to $487.8 million in 2024, driven by increased sales under subscription plans[461]. - Contract liabilities (deferred revenue) rose by $232.3 million, or 31.3%, to $973.6 million in 2024, attributed to acquisitions and increased subscription invoicing[461]. - Remaining performance obligations as of December 31, 2024, were approximately $7.9 billion, with an expectation to recognize 20%-25% over the next 12 months[464]. Investments and Financial Instruments - The company invests in a portfolio of marketable and non-marketable securities, with potential unrealized losses affecting earnings performance[221]. - A hypothetical 100 basis point increase in interest rates would result in a $0.7 million decline in the fair market value of the investment portfolio[357]. - The company has access to a $200.0 million line of credit, with available borrowings reduced by outstanding letters of credit totaling $7.8 million[358]. - The company has not engaged in any currency hedging activities, exposing it to foreign exchange rate risks[361]. - The company faces counterparty risk with respect to the 2027 Note Hedge transactions, which could adversely affect its financial results[260]. - The company issued $690.0 million aggregate principal amount of 2027 Notes, with net proceeds of approximately $673.8 million after deducting costs[500]. - The effective interest rate for the 2027 Notes is 0.99%, with total interest expense of $6.627 million for the year ended December 31, 2024[505]. - The estimated fair value of the 2027 Notes increased to $1,798.5 million as of December 31, 2024, compared to $873.3 million as of December 31, 2023[505]. Legal and Regulatory Risks - Legal claims related to product liability and intellectual property could result in significant costs and adversely affect business prospects[222][229]. - The company faces risks from class action lawsuits that could lead to substantial monetary judgments and reputational harm[224]. - The ability to enforce patent rights internationally may be limited, impacting the company's competitive position in foreign markets[237]. - Open-source software use may expose the company to risks that could harm its intellectual property and business operations[238]. - New and existing laws and regulations could materially and adversely affect the company's business operations and compliance requirements[240]. - The evolving nature of laws and regulations may lead to uncertainties that could impact the company's policies and practices[241]. - The company is subject to evolving corporate governance and public disclosure regulations, which may increase general and administrative expenses[243]. Assets and Liabilities - Total cash and cash equivalents at the end of 2024 were $466,763, down from $600,670 at the end of 2023, a decrease of 22%[374]. - The company holds cash and cash equivalents totaling $454,844 as of December 31, 2024, down from $598,545 in 2023[392]. - Total inventory decreased to $265.3 million as of December 31, 2024, from $269.9 million in 2023, with provisions to reduce inventories amounting to approximately $17.8 million[481]. - The total allowance for expected credit losses on customer receivables was $5.6 million as of December 31, 2024, up from $4.0 million in 2023[480]. - The company recorded provisions to reduce inventories to their lower of cost or net realizable value of approximately $17.8 million in 2024, compared to $5.4 million in 2023[481]. - The company recognized a warranty expense of $5.591 million in 2024, a decrease from $8.062 million in 2023, indicating improved product reliability or cost management[428]. Strategic Growth and Innovation - The company’s strategic investments increased to $332,550 thousand in 2024, compared to $231,730 thousand in 2023, representing a growth of 43.5%[366]. - The company recognized an unrealized gain of $75.6 million for a strategic investment during the year ended December 31, 2024[491]. - The company exercised call options and acquired the remaining outstanding stock of two strategic investments, resulting in net non-taxable gains of $42.3 million and $51.6 million for Fusus and Dedrone, respectively[490]. - The company is currently evaluating the impact of new accounting standards on its consolidated financial statements, including ASU 2023-09 and ASU 2024-03[454][457]. Shareholder and Governance Matters - The company’s amended and restated bylaws include exclusive forum provisions that may limit shareholders' ability to bring claims in favorable judicial forums[248]. - The conditional conversion feature of the Notes may adversely affect the company's liquidity if triggered[251]. - The total potentially dilutive securities increased to 8.790 million in 2024 from 7.048 million in 2023, reflecting changes in stock-based awards and convertible notes[452]. - The weighted average shares outstanding increased to 75.748 million in 2024 from 74.195 million in 2023, contributing to the earnings per share growth[452].

Core Viewpoint - Axon Enterprise, Inc. reported strong fourth-quarter 2024 results, exceeding earnings expectations and demonstrating significant year-over-year revenue growth driven by its TASER and Software & Sensors segments [1][2]. Financial Performance - Earnings per share for Q4 2024 were $2.08, surpassing the Zacks Consensus Estimate of $1.53 by 36% and increasing 84.1% year over year [1][3]. - Total revenues reached $575.1 million, exceeding the consensus estimate of $566.1 million and reflecting a 34% year-over-year increase [1]. Segment Performance - The TASER segment saw revenues increase by 37.1% year over year to $221.2 million, driven by strong demand for TASER devices and virtual reality training solutions [3][4]. - The Software & Sensors segment's revenues climbed 40.6% to $230.3 million, supported by increased adoption of Axon Evidence and premium software offerings [4][5]. Product Innovations - Axon launched the next-generation body-worn camera, Axon Body 4, in April 2023, which has generated significant demand and contributed to segment growth [5]. - The company shipped over 200,000 TASER devices, 300,000 body cameras, and 9 million cartridges in 2024, indicating robust product adoption [3]. Future Outlook - For 2025, Axon expects revenues to be between $2.55 billion and $2.65 billion, indicating approximately 25% year-over-year growth, with adjusted EBITDA projected in the range of $640 million to $670 million [6]. - The Zacks Consensus Estimate for AXON's 2025 earnings per share has increased by 2% to $6.63, while the estimate for 2026 has risen by 6.4% to $8.34 [10]. Strategic Initiatives - Axon is focusing on strategic collaborations, including a partnership with Skydio to introduce a comprehensive line of drones for public safety [7][9]. - The acquisition of Dedrone in October 2024 enhances Axon's offerings in airspace security and supports its Drone as First Responder programs [9]. Market Position - Despite strong performance, Axon shares have underperformed compared to the Zacks Aerospace - Defense Equipment industry and the S&P 500, with a decline of 18.7% over the past three months [12]. - The stock is trading at a forward P/E ratio of 78.12X, significantly higher than the industry average of 36.27X, raising concerns about valuation [15].

Core Viewpoint - Axon Enterprise's stock experienced significant volatility due to analyst downgrades and concerns over federal budget cuts, but a strong Q4 earnings report has restored investor confidence, leading to a notable share price increase [1][2]. Group 1: Financial Performance - Axon reported adjusted earnings per share of $2.08, exceeding expectations by 48% and marking an 81% increase year-over-year [7]. - Revenue grew by 33%, and the company secured its largest enterprise deal to date, with enterprise bookings tripling compared to the previous year [7]. - Future contracted bookings reached $10.1 billion, nearly five times the revenue generated in 2024, indicating strong growth potential [7]. Group 2: Federal Budget Concerns - Approximately 84% of Axon's revenue is derived from the U.S., with an estimated one-third coming from federal government contracts [3]. - The Pentagon plans to reallocate 8% of its total budget over the next five years, potentially affecting $300 billion in spending [4]. - Despite concerns, Axon management believes that federal budget cuts could lead to more opportunities for securing federal contracts, suggesting a positive outlook for the company [2][6]. Group 3: Market Valuation - Axon is currently trading at a forward-adjusted P/E ratio of 100, which is high but reflects the company's growth potential, as it has only penetrated less than 2% of its Total Addressable Market (TAM) estimated at $129 billion [8][6]. - Analysts from JPMorgan and TD Cowen project an implied upside of nearly 26% for Axon based on recent price targets [9].

Core Insights - Axon Enterprise, Inc. reported strong financial results for Q4 2024, with adjusted earnings of $2.08 per share, exceeding the Zacks Consensus Estimate of $1.53, marking an 84.1% year-over-year increase [1] - Total revenues reached $575.1 million, surpassing the consensus estimate of $566.1 million, and increased by 33.6% year over year, driven by strong demand for TASER and Axon Body 4 products [2] Financial Performance - For the full year 2024, Axon reported revenues of $2.08 billion, reflecting a 33.4% increase year over year, with adjusted earnings of $5.94 per share, up from $4.16 in 2023 [3] - In Q4, the Software & Sensors segment saw revenues rise 40.6% to $230.3 million, with adjusted gross margin increasing to 77.2% from 75.7% [4] - Sensors & Other revenues climbed 17.5% to $123.6 million, although adjusted gross margin declined to 36.2% from 47.5% due to product mix issues [5] - TASER segment revenues increased 37.1% year over year to $221.2 million, with adjusted gross margin improving to 63.7% from 57.6% [6] Cost and Margin Analysis - Axon's cost of sales rose 37.8% year over year to $229.3 million, while total operating expenses increased 63.5% to $361.6 million [7] - The adjusted gross margin for the company improved to 63.2% from 62% in the previous year [7] Balance Sheet and Cash Flow - At the end of Q4 2024, Axon had cash and cash equivalents of $454.8 million, down from $598.5 million at the end of 2023 [8] - The company generated net cash of $408.3 million from operating activities in 2024, significantly higher than $189.3 million in the previous year, with adjusted free cash flow at $344.3 million compared to $148.1 million [8] Future Outlook - For 2025, Axon expects revenues to be between $2.55 billion and $2.65 billion, indicating approximately 25% year-over-year growth at the midpoint [9] - Adjusted EBITDA is projected to be in the range of $640 million to $670 million, with capital expenditures expected between $140 million and $180 million [9][10]