Axon(US:AXON) The Motley Fool·2026-01-08 05:14Core Insights - Axon Enterprise's stock experienced a 4% decline in 2025 after more than doubling in 2024, yet the company maintains strong long-term growth prospects [1] Company Overview - Axon specializes in technology-driven public safety products, including innovative devices and a growing cloud-based platform that integrates hardware and software [2] - The company is widely recognized for its Taser product, having sold over 1 million units, with a goal to reduce police-related deaths by 50% by 2033 [2] Financial Performance - In the third quarter, Axon reported a 31% year-over-year increase in sales, although it faced a small operating loss and a net loss of $2 million due to growth-related expenses [3] - Despite the recent losses, Axon has reported positive net income in years prior to the third quarter [3] Revenue Model - Axon's business model includes long-term contracts and recurring revenue, creating a high barrier to entry for competitors [4] - Annual recurring revenue rose by 41% year-over-year in the third quarter, reaching $1.3 billion, with future contracted bookings totaling $11.4 billion [4] Valuation Metrics - Axon stock has a forward one-year P/E ratio of 61 and a price-to-free-cash-flow ratio of 329, indicating a premium valuation typical for high-growth stocks [6] - The premium valuation is supported by the company's strong performance and long-term opportunities, despite the stock's poor performance in the previous year [6] Investment Considerations - While Axon does not appear to be a bargain at its current price, it may be suitable for long-term investors who could consider a dollar-cost-averaging strategy for better entry points [7]