Core Thesis - Axon Enterprise, Inc. is viewed positively due to its strong market position and growth potential despite recent stock price volatility [1][5] Company Overview - Axon is a leader in non-lethal electric weapons, particularly Taser products, which account for approximately 40% of its revenue [2] - The company has diversified into related areas such as body-worn cameras, dash cams, and a high-margin cloud software platform, Evidence.com, creating a comprehensive ecosystem [2] Financial Performance - Axon reported revenue of $710.6 million, reflecting a year-over-year growth of 30.6%, slightly exceeding expectations [3] - However, adjusted EPS of $1.17 fell short of estimates, contributing to a 35% stock drawdown, including a 14% drop post-earnings report [3][4] Margin Pressures - Hardware margins have been impacted by tariffs from suppliers in China, Taiwan, and Vietnam, with Q3 being the first quarter fully affected by these costs [4] - R&D spending increased by 50% due to higher stock-based compensation, further straining margins [4] Valuation and Market Position - Despite the recent sell-off, Axon trades at a premium valuation, historically rarely dipping below 100x earnings [5] - The company is expected to benefit from new product offerings, international expansion, and favorable industry trends, supporting a long-term growth narrative [5] Previous Coverage - A previous bullish thesis highlighted rapid revenue growth and strong product adoption, with Axon's stock appreciating approximately 6.78% since that coverage [6]