Should I Buy Axon (AXON)? Finance YouTuber Analysis

The YouTuber views Axon as a high-growth company expected to grow close to 30% for the next couple of years, with potential to become a $100 billion company due to vertical integration and margin recovery. Despite its high current valuation, he would be interested in buying more shares if it drops below $500, ideally closer to $400, to gain a margin of safety.

“I would love it back under $500, even closer to $400. That would be ideal right now.”

The YouTuber would buy more Axon if it pulls back from its current price of $597, as he finds it less attractive after its sharp, news-driven rally. He previously bought it at lower prices and hopes for a re-entry point.

“Axon, unfortunately, unfortunately, it went up too quickly, right? Close to $600 per share. It's It's way less attractive right now. So, I hope we do have a pullback. And if not, then fine, then I'll have to live with a 2.5% position here.”

The YouTuber added five extra shares of Axon at $49, increasing his position by 25%. He notes the stock has reclaimed resistance and is currently trading around $464, indicating a positive short-term trend.

“With regard to Axon, I also added five extra shares. That's a 25% increase at $49.”

The YouTuber is actively building up his Axon position, aiming to grow it above $10,000. He believes the company can be worth hundreds of billions in the future, providing time to accumulate more shares despite a recent 12% rise.

“I would like to grow these two positions for sure over the next couple of weeks with Axon.”

The YouTuber initiated a new position in Axon, buying 20 shares at around $392, citing its exposure to drones, physical AI, and defense. He highlights its rapid growth, expanding total addressable market, and expected future profitability, despite its premium valuation. He also notes its strong competitive moat through proprietary hardware and government security clearances.

“I bought 20 shares of Axon at 300 and close to $92 per share. Very good timing because the next day the stock went up quite a lot on that drone announcement or report from the US government. And of course, drones is now part of Axon's business.”

The YouTuber is trending towards buying Axon, viewing it as a high-growth company with a near-monopoly in its segments (connected devices and software/services). Despite its current valuation, they believe it's becoming 'less expensive' and offers a good opportunity for long-term investors, especially given its strong revenue growth and increasing software contribution to margins. They also like that it diversifies their portfolio away from existing holdings.

“In my case, yes, it is looking at an Axon, a Reddit, and a Shopify.”

The YouTuber invested in Axon Enterprise after a deep dive analysis and the stock has since risen over 70%. He highlights it as an example of finding opportunities in individual stocks, even when the broader market might be weak, and suggests it as an alternative to buying more of an existing, underperforming position.

“Also als Beispiel Axon Enterprise. Dazu hatte ich dieses Jahr einen Deep Dive veröffentlicht auf meiner Seite. Habe dann selbst auch eine Position aufgemacht und das Ding ist hier jetzt über 70% gestiegen.”

The YouTuber views Axon Enterprise as a highly misunderstood company with a strong value proposition. Its transition from tasers to a SaaS model with evidence.com has created high switching costs and a widening moat. A reverse DCF analysis, assuming 30% free cash flow margins and a 3% terminal growth rate, indicates the company needs to grow revenue by about 18% annually over the next decade, which is well below its historical and projected growth rates.

“This is a company that has a demonstrated history of optionality. So, I think that shares are actually very reasonable today even though it might look expensive if you're just looking at its multiples.”

The YouTuber is bullish on Axon, highlighting 34% top-line growth and expanding operating margins. He emphasizes the company's strong recurring revenue from software solutions and future contracted bookings, indicating a widening moat. A reverse discounted cash flow analysis suggests the current stock price implies a revenue growth rate (17% over 10 years) that is significantly lower than historical and expected future growth.

“I actually think that's a pretty good deal.”

The YouTuber argues that Axon stock is now attractive after a 35% drop, which has lowered the required revenue growth rate to justify its price. He uses a reverse discounted cash flow analysis, noting that the company's historical growth and analyst estimate revisions suggest it can easily meet the new, lower growth targets. He believes the current price offers a good entry point for long-term investors.

“So, I actually think this is now a very attractive stock to hold and own.”

The YouTuber added to Axon in late January/early February because the company expects revenue to grow about 30% per year over the next three years. He considers it one of the most anti-fragile companies.

“I added it in late January, early February. Why? Because the company came out and said that they expect revenue to be growing about 30% per year over the next three years. This continues to be what I believe is one of the most anti-fragile companies around.”

The YouTuber names Axon Enterprise as the most anti-fragile stock, emphasizing its strong moat from high switching costs within its ecosystem of smart devices and evidence.com. Its optionality is driven by an accelerating net revenue retention rate and innovations like Draft One (AI-powered report generation), Drone as a First Responder, ecosystem expansion (VR training), and international growth beyond US police departments.

“Let's get to the number one most anti-fragile stock. I believe that is Axon Enterprise.”

The YouTuber argues that Axon is the best SaaS stock to own right now, despite seemingly high valuation metrics. He highlights strong revenue growth acceleration, particularly in software and services, and impressive future contracted bookings. He believes the stock is undervalued when considering optimized free cash flow margins and a discounted cash flow model, projecting significant growth over the next three years.

“I feel comfortable saying it is the best, if not one of the best SAS stocks to own right now. It's one of the best stocks for me to own whether it's SAS or not. And that company is none other than Axon Enterprise.”

The YouTuber identifies Axon Enterprise as 'anti-fragile,' poised to get stronger with AI due to its applications for first responders, such as AI-drafted incident reports. He notes the stock continues to fall, and a reverse discounted cash flow analysis with a 30% free cash flow margin suggests it's a good deal today.

“If you do a reverse discounted cash flow analysis on this and you offer up a 30% free cash flow margin, which I don't think is being too aggressive, it looks like a pretty good deal today.”

The YouTuber trimmed his Axon position from 12% to 7% of his portfolio in December 2024. While he believes the moat is expanding, his reverse discounted cash flow analysis indicated the stock was overvalued, requiring 29% annual revenue growth for a decade compared to an expectation of 22%.

“I trimmed Axon to 7%.”

The YouTuber recommends Axon, known for police body cameras and tasers, as a way to gain exposure to the counter-drone theme without pure-play risk. He highlights its acquisition of a counter-drone company and the 300% growth in that division last year, alongside its stable recurring revenue from police departments. Although the stock isn't cheap, its core business provides a solid foundation.

“So, you're getting exposure to the counter drone theme, but you're not taking a pure play risk at it because you know they're going to get that police revenue every single month, right?”

The YouTuber, a long-term shareholder, is trimming his position in Axon due to concerns about its high valuation, particularly its enterprise value to sales and price to free cash flow multiples. He notes that despite strong revenue growth, net income has dropped, and significant stock-based compensation and capital expenditures are impacting profitability and cash generation. The increasing debt on the balance sheet is also a concern.

“I have been taking a little bit off the table, but like I said, this is a stock that I've been helding for over 10 years now.”

The YouTuber, who holds Axon as his largest personal position, views the company's recent acquisition of an AI-powered 911 emergency response company as a strategic move that further strengthens its ecosystem for law enforcement. He highlights Axon's strong growth in services revenue and its ability to integrate AI as a tool where it makes sense, making the business even stickier despite its high valuation.

“This performance has actually made Axon my biggest personal holding. So, so love to see announcements like this.”

The YouTuber, a long-term holder, states he will not sell Axon despite its high valuation (forward P/E of 100, EV/Sales of 17.7) because the company consistently executes, maintains strong revenue growth (31% in Q1), expands its addressable market, and improves profitability (25% adjusted EBIT margin). He acknowledges the valuation is uncomfortable but believes the underlying business performance justifies holding.

“I am very uncomfortable by the valuation frankly with Axon, but I don't want to sell the stock because the company is performing so well.”

The YouTuber is holding his position in Axon despite valuation concerns, citing the company's phenomenal growth, strong recurring revenue model, high gross margins on both software and hardware, and a continuously expanding total addressable market. He acknowledges the stock is expensive but finds it hard to sell a company performing so well.

“this is one of those that I just am not going to completely sell out of my position and of all of the money that I manage personally and for people in my family this is the biggest position so not one that I'm going to get out of because it's hard to sell a company that is performing this well but that valuation concern is definitely something that I have in mind”

The analyst has trimmed their position in Axon, despite acknowledging it as a 'phenomenal company' with consistent growth and long-term contracts. The decision to trim is based on the stock's current 'crazy price' and significant multiple expansion, with a P/S multiple of nearly 25 and a P/E of 160, suggesting 'Peak optimism' and a potential for future underperformance if growth expectations are not met.

“I think axon Falls in that category I have trimmed my position a little bit in 2024 but as you can see with the gains recently gave up a little bit of upside as I did that.”

The YouTuber, an existing Axon investor, believes the company has significant growth potential in new verticals like the enterprise market, citing a potential $17 billion market for body cameras in retail. However, he expresses concern about the stock's current valuation, trading at 25 times sales, which is significantly higher than its historical average, suggesting it's priced for substantial future growth that may not materialize without major new deals.

“this is an extremely expensive stock that's what ultimately has me a little worried is this stock has gotten a little bit ahead of itself phenomenal business a lot of growth potential”

The YouTuber, a long-term holder of Axon, suggests considering selling some shares due to the extremely high valuation, with the stock trading at 59 times adjusted EBITDA and 15 times revenue. He highlights the significant stock-based compensation (approaching 20% of revenue) as a major concern that dilutes shareholder value and questions if the current price is justified, despite the company's strong operational performance.

“if the stock price remains where it is today I would consider taking some of my gains off the table because the price has gone so far multiple expansion is now not going to be a catalyst or a Tailwind behind axon in fact multiples are probably going to be a headwind for axon”

The analyst maintains a hold on Axon due to its high valuation, despite strong growth and a compelling long-term vision. While the company continues to expand its ecosystem with acquisitions like Dr Drone and Fusus, and shows impressive revenue growth, its high price-to-earnings and price-to-sales multiples make it an expensive stock. The recent slowdown in bookings also raises concerns about the sustainability of its high growth rate, which is necessary to justify its current valuation.

“This is one of those situations where this can be a phenomenal company and maybe not such a phenomenal stock just given the price of shares right now.”

The YouTuber highlights Axon's new AI-powered 'Draft One' tool, which automates police report writing from body camera footage, as a significant value-add to their subscription services. He notes the company's strong transition to a software-as-a-service model with substantial contracted future revenue. However, he expresses hesitation due to the stock's very high valuation multiples (P/E of 130, EV/Sales of 13.8), suggesting it's an expensive stock despite strong operational performance.

“I love the long-term contracts I love the margins I love everything that they're doing with the business but that's a very very expensive stock even on a next 12-month basis the Enterprise Value to sales multiple is 11 so that's really the hesitation that I have for on but from an operating standpoint it's hard to argue with anything that they're doing as a company.”

The YouTuber, a long-term holder, is not selling Axon shares despite its high valuation, citing its consistent ability to compound growth at over 20% annually. He highlights strong Q4 2023 earnings, significant revenue growth across all segments (especially cloud services), high gross margins, improving operating profit, and a shift to a durable subscription-based business model with long-term contracts and high net retention rates. He acknowledges the stock is expensive but views it as a very high-quality company with continued growth potential in law enforcement and new markets.

“it's a very expensive stock I think that's worth keeping in mind as I'm recording Shares are trading for about $2.4 billion market cap it looks like Shares are going to be up a little bit in pre-market tomorrow so that's in excess of 10 times sales it's a very expensive stock but a very very high quality company as well so lot to like about axon's operations if I was a buyer of the stock I would love to see the valuation come down a little bit but as somebody who just holds shares I'm definitely not selling right now”

The YouTuber has held Axon for a long time, citing its consistent growth driven by a shift from tasers to a subscription-based ecosystem of body cameras and cloud services (evidence.com). While acknowledging its high valuation and past reinvestment of profits, he notes the company is now turning profitable and expects continued bottom-line growth.

“still a company I love very expensive again which seems to be a theme Here Enterprise Value to sales is 12.7 so that's pretty expensive”

The YouTuber owns Axon shares and views it as a company with a very bright future due to its strong growth drivers, including its traditional taser business, the rapidly expanding software and sensors segment, and a successful shift to a subscription model with significant contracted revenue backlog. However, he notes that the stock is already expensive at 60 times earnings, and much of the growth is priced in, leading him to expect market-matching rather than outperforming returns.

“It's definitely not a value stock and that's really the hesitation that I have I do own shares but it's not the kind of company that I'm expecting to outperform the market by a wide margin over the next 10 years just because a lot of that growth is already priced in.”

The analyst notes that while Axon is a phenomenal growth company with strong revenue and margin expansion potential, its current valuation metrics like Enterprise Value to Sales (11.3), Enterprise Value to EBITDA (94), Enterprise Value to Free Cash Flow (69), and P/E ratio (nearly 60) are very high. He believes much of the future growth is already priced in, leading him to trim his long-held position.

“This is a stock that I have owned for a very long time but I am starting to pair back on that because of the multiple that you're paying now.”

The YouTuber, a long-term holder of Axon, notes the company's strong operational performance, including significant growth in cloud services and recurring revenue from bundled subscriptions. He highlights the large international market opportunity as a key future growth driver. However, he also points out the stock's very high valuation, which led him to trim a small portion of his shares earlier in the year.

“I actually sold a small portion of shares earlier this year because it was such an expensive company and didn't want to take that Financial Risk that they would maybe undere execute those expectations.”

The analyst suggests Axon Enterprise as a long-term buy, highlighting its strong growth in body cameras and cloud services for law enforcement, sticky 10-year contracts, and expanding margins. He believes the company has significant future growth potential beyond current analyst estimates, especially in personal protection and home safety.

“this is just one of those companies that 10 20 30 years from now I think axon is going to play a much much bigger role not just in law enforcement but in personal protection and potentially even home safety”

The YouTuber continues to hold Axon due to its consistent growth, driven by expanding its product bundles to law enforcement with new offerings like drones and potential future expansion into personal protection and home security. The company's shift to subscription bundles and high-margin cloud services also contributes to its strong performance, despite the stock being expensive.

“That's why I continue to hold it. A lot to like about Axon right now. Very expensive stock, I think that's worth noting. Investors are willing to pay up for a high quality company like this and it's not one that I'm selling anytime soon.”

Travis Hoium recommends holding Axon due to its strong growth as a platform in law enforcement, transitioning from tasers to body cameras and software-as-a-service. He highlights its sticky business model, potential for high profitability as it shifts focus from growth to the bottom line, and its defensible market position due to integrated services that make it difficult for competitors to disrupt.

“given that really strong position this is a company that I just don't see going anywhere love their growth story love the potential profitability I think they will turn that on soon and really start to grow the bottom line that's why this is a stock that continues to be a great hold in my portfolio”

The analyst sold some shares of Axon, citing that the stock had become too expensive. Despite strong operational growth in cloud services, body cameras, and tasers, and improving gross margins, the company's income from operations and net income are declining due to increased operating expenses. The stock trades at a high 14 times sales, and future contracted revenue growth was not as strong as expected, leading to concerns about its valuation.

“I've actually sold some shares in axon recently after holding them for many many years because the stock was simply getting too expensive”

The analyst, a long-term holder, views Axon as a strong hold due to its significant moat and predictable revenue from long-term government contracts. The company, known for Tasers and body cameras, has high-margin software services (70% gross margin) and consistently grows revenue by 20-30% annually. Future growth optionality includes expanding into the consumer self-defense market and potentially home security.

“I don't see anybody coming to disrupt axon's business it's kind of like this Niche that's big enough to be a great business but small enough to not attract the attention of kind of big competitors that may want to swoop in and grab it from them and the potential upside is moving into the consumer Market”

The analyst is bullish on Axon, citing strong revenue growth (34% YoY), improving gross margins, and profitability. They highlight the high-margin Axon Cloud segment growing at 51% YoY and the significant future contracted revenue of $3.73 billion over 10 years, indicating a sticky business model with law enforcement. The company also has zero debt and positive free cash flow, suggesting financial health and a strong competitive position.

“I still I can't explain Travis why I still have not bought shares of this of this of this wonderful company”

The YouTuber recommends buying Axon due to its strong business model, which combines hardware (tasers, body cameras) with high-growth software-as-a-service (SaaS) products like Axon Cloud. He highlights the company's consistent revenue growth, increasing profitability, and the strategic bundling of products into long-term subscription contracts, which he believes creates a powerful and sustainable flywheel effect. Despite a high valuation, he argues the growth rate justifies the price.

“One stock that I have liked for almost a decade now and continue to believe in their future is Axon.”