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Axon (AXON) Up 1.8% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Axon Enterprise (AXON - Free Report) . Shares have added about 1.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Axon due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Axon Enterprise Q2 Earnings Top Estimates, '24 View Raised
Axon Enterprise reported second-quarter 2024 adjusted earnings of $1.20 per share, which surpassed the Zacks Consensus Estimate of $1.06. The bottom line increased 9.1% year over year despite a significant rise in the cost of sales.
Total revenues of $504.1 million surpassed the consensus estimate of $477 million and increased 34.6% year over year. The top line benefited from strong demand for TASER and body camera products. Growth in TASER and Sensors revenues with increased adoption of premium software offerings augmented the top-line results.
Segmental Details
Software & Sensors: Within this segment, Axon’s Cloud and Services revenues rose 46.8% to $194.7 million. The uptick was driven by increased adoption of software applications from both new and existing customers, real-time operations and productivity software. Axon Cloud software growth was primarily driven by Axon Evidence. Axon Cloud’s gross margin expanded to 72.4% from 69.7% in the year-ago period, driven by reduced professional services costs related to the installation of Axon Fleet hardware.
Sensors & Other revenues climbed 28.4% to $112.4 million, driven by increased demand for Axon Body 4, partially offset by lower Axon Fleet revenues. The gross margin declined to 38.9% from 52.9% in the year-ago period due to manufacturing overhead reallocations made in the year-ago quarter and inventory reserve charges associated with legacy products.
TASER: The segment’s revenues jumped 27.6% year over year to $197 million, driven by growth in Taser devices and cartridges, associated with rising volumes of TASER 10, Axon Evidence & Cloud services and Virtual Reality training. The gross margin declined to 60.4% from 60.5% in the year-ago period due to increased stock-based compensation expenses.
Margin Profile
Axon Enterprise’s cost of sales increased 40.6% year over year to $200.4 million. Selling, general and administrative expenses increased 41.3% year over year to $169.4 million.
Total operating expenses climbed 41.2% year over year to $270.9 million. The gross margin deteriorated to 60.3% from 62.0% in the year-ago period.
Balance Sheet & Cash Flow
At the end of the second quarter, Axon Enterprise had cash and cash equivalents of $566.5 million compared with $598.5 million in December 2023 end. Long-term lease liabilities totaled $41.7 million compared with $33.6 million in 2023 end.
In the first six months of 2024, the company generated net cash of $66.8 million from operating activities against $13.7 million cash spent in the year-ago period.
Adjusted free cash flow was $49.2 million in the first six months of the year against $26.2 million cash outflow in the prior-year period.
Outlook
For 2024, Axon Enterprise expects revenues to be in the range of $2.00-$2.05 billion compared with $1.94-$1.99 billion guided earlier. The metric indicates approximately 29.5% year-over-year growth at the midpoint. Adjusted EBITDA is expected to be approximately $460-$475 million, implying an adjusted EBITDA margin of 23.1%. This represents growth from its previous guided range of $430-$445 million.
The company expects capital expenditures to be between $80 million and $95 million. This includes investments in TASER 10 automation and capacity expansion. It anticipates stock-based compensation expenses to be in the range of $355-$370 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
The consensus estimate has shifted -31.07% due to these changes.
VGM Scores
At this time, Axon has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Axon has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Axon belongs to the Zacks Security and Safety Services industry. Another stock from the same industry, Johnson Controls (JCI - Free Report) , has gained 6.5% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Johnson Controls reported revenues of $7.23 billion in the last reported quarter, representing a year-over-year change of +1.4%. EPS of $1.14 for the same period compares with $1.03 a year ago.
For the current quarter, Johnson Controls is expected to post earnings of $1.24 per share, indicating a change of +18.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Johnson Controls. Also, the stock has a VGM Score of D.
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Axon (AXON) Up 1.8% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Axon Enterprise (AXON - Free Report) . Shares have added about 1.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Axon due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Axon Enterprise Q2 Earnings Top Estimates, '24 View Raised
Axon Enterprise reported second-quarter 2024 adjusted earnings of $1.20 per share, which surpassed the Zacks Consensus Estimate of $1.06. The bottom line increased 9.1% year over year despite a significant rise in the cost of sales.
Total revenues of $504.1 million surpassed the consensus estimate of $477 million and increased 34.6% year over year. The top line benefited from strong demand for TASER and body camera products. Growth in TASER and Sensors revenues with increased adoption of premium software offerings augmented the top-line results.
Segmental Details
Software & Sensors: Within this segment, Axon’s Cloud and Services revenues rose 46.8% to $194.7 million. The uptick was driven by increased adoption of software applications from both new and existing customers, real-time operations and productivity software. Axon Cloud software growth was primarily driven by Axon Evidence. Axon Cloud’s gross margin expanded to 72.4% from 69.7% in the year-ago period, driven by reduced professional services costs related to the installation of Axon Fleet hardware.
Sensors & Other revenues climbed 28.4% to $112.4 million, driven by increased demand for Axon Body 4, partially offset by lower Axon Fleet revenues. The gross margin declined to 38.9% from 52.9% in the year-ago period due to manufacturing overhead reallocations made in the year-ago quarter and inventory reserve charges associated with legacy products.
TASER: The segment’s revenues jumped 27.6% year over year to $197 million, driven by growth in Taser devices and cartridges, associated with rising volumes of TASER 10, Axon Evidence & Cloud services and Virtual Reality training. The gross margin declined to 60.4% from 60.5% in the year-ago period due to increased stock-based compensation expenses.
Margin Profile
Axon Enterprise’s cost of sales increased 40.6% year over year to $200.4 million. Selling, general and administrative expenses increased 41.3% year over year to $169.4 million.
Total operating expenses climbed 41.2% year over year to $270.9 million. The gross margin deteriorated to 60.3% from 62.0% in the year-ago period.
Balance Sheet & Cash Flow
At the end of the second quarter, Axon Enterprise had cash and cash equivalents of $566.5 million compared with $598.5 million in December 2023 end. Long-term lease liabilities totaled $41.7 million compared with $33.6 million in 2023 end.
In the first six months of 2024, the company generated net cash of $66.8 million from operating activities against $13.7 million cash spent in the year-ago period.
Adjusted free cash flow was $49.2 million in the first six months of the year against $26.2 million cash outflow in the prior-year period.
Outlook
For 2024, Axon Enterprise expects revenues to be in the range of $2.00-$2.05 billion compared with $1.94-$1.99 billion guided earlier. The metric indicates approximately 29.5% year-over-year growth at the midpoint. Adjusted EBITDA is expected to be approximately $460-$475 million, implying an adjusted EBITDA margin of 23.1%. This represents growth from its previous guided range of $430-$445 million.
The company expects capital expenditures to be between $80 million and $95 million. This includes investments in TASER 10 automation and capacity expansion. It anticipates stock-based compensation expenses to be in the range of $355-$370 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
The consensus estimate has shifted -31.07% due to these changes.
VGM Scores
At this time, Axon has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Axon has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Axon belongs to the Zacks Security and Safety Services industry. Another stock from the same industry, Johnson Controls (JCI - Free Report) , has gained 6.5% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Johnson Controls reported revenues of $7.23 billion in the last reported quarter, representing a year-over-year change of +1.4%. EPS of $1.14 for the same period compares with $1.03 a year ago.
For the current quarter, Johnson Controls is expected to post earnings of $1.24 per share, indicating a change of +18.1% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Johnson Controls. Also, the stock has a VGM Score of D.