Baird Raises Axon Enterprise (NASDAQ: NASDAQ:) Price Target to $400 Amid Growth Opportunities in AI and Drone Technology
Baird has updated its Outperform rating on Axon Enterprise (NASDAQ: NASDAQ:) and increased the stock's price target to $400 from $360. Analysts are bullish on Axon's growth prospects in the near and long term, driven by new artificial intelligence capabilities and opportunities in the enterprise and drone technology sectors.
The company's core products, including Taser 10 and Body Camera 4, along with its software solutions, have shown strong growth. Axon's software segment saw a 47% year-over-year increase in revenue in the second quarter, reaching nearly $800 million on an annualized basis.
Axon's recent record-breaking second quarter performance, with revenue exceeding $500 million and new business bookings surpassing $1 billion, has further fueled optimism. The company's diversified growth avenues, from traditional products to new technological advancements, position it favorably in the market.
Despite cautiousness regarding potential economic downturns, Axon's Cloud and Services segment saw the fastest growth at 47% year-over-year. The company's future contracted revenue stands at approximately $7.4 billion, with full-year revenue guidance raised to between $2 billion and $2.05 billion.
InvestingPro data supports Baird's positive assessment, highlighting Axon's robust financial health and market potential. With a market capitalization of $27.54 billion and strong revenue growth of over 32% in the last twelve months as of Q2 2024, Axon's growth opportunities are validated. Analysts expect net income growth this year, driving the stock price upward.
With a forward-looking P/E ratio of 94.38 and a PEG ratio suggesting undervaluation relative to earnings growth, Axon's valuation may be compelling for investors. The InvestingPro Fair Value estimate of $254.44, along with Baird's price target of $400, offer a range for investors to consider.
In conclusion, Axon Enterprise's growth prospects in AI and drone technology, coupled with its strong financial performance, make it an attractive investment opportunity for investors looking to capitalize on emerging technologies and market trends.