Axon Enterprise Stock Dropped 13% – Have You Assessed The Risk

Core Insights - Axon Enterprise (AXON) stock has decreased by 13.3% over the past 21 trading days and is currently viewed as relatively expensive, raising concerns about its valuation [1][2] - The company has a market capitalization of $51 billion and reported $2.4 billion in revenue, with a revenue growth of 32.4% over the last 12 months [3] - AXON stock has historically underperformed the S&P 500 during economic downturns, with significant declines observed in various crises [4][6] Financial Performance - The current trading price of AXON is $652.17, with a P/E multiple of 155.9 and a P/EBIT multiple of 185.9, indicating a high valuation [3] - The company has an operating margin of -0.06% and a Debt to Equity ratio of 0.04, suggesting low leverage [3] - The Cash to Assets ratio stands at 0.36, reflecting the company's liquidity position [3] Historical Stock Performance - AXON stock experienced a peak-to-trough decline of 58.5% from $203.51 on February 11, 2021, to $84.37 on May 11, 2022, compared to a 25.4% decline for the S&P 500 [4] - The stock fully recovered to its pre-Crisis peak by March 1, 2023, and reached a high of $870.97 on August 7, 2025, before trading at its current price [4] - Historical data shows that AXON stock has had significant recoveries after downturns, with a median return of 68.9% within a year following sharp declines since 2010 [3] Investment Strategy - The Trefis High Quality Portfolio, which includes 30 stocks that have consistently outperformed benchmarks, is recommended as a more diversified investment approach compared to relying solely on AXON stock [2][5] - The portfolio aims to deliver improved returns with reduced risk, as evidenced by its performance metrics during past financial crises [2][5]