AXON ENTERPRISE, INC. (AXON) Stock Analysis
AXON ENTERPRISE, INC. (AXON) Stock Analysis
Analysis from 10-Q filed 2025-11-05. Data as of Q4 2025.
Overall Grade: F (Concerning)
AXON ENTERPRISE, INC. faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | -8.9% | Below expectations |
| FCF Margin | 2.7% | Cash flow pressure |
| Debt/Equity | 0.6x | Moderate leverage |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
Explore AXON ENTERPRISE, INC.: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: AXON ENTERPRISE, INC. earns -8.9% ROIC
AXON ENTERPRISE, INC.'s trailing-twelve-month ROIC of -8.9% (sector median: 7.3%), driven by NOPAT margin of -14.7% combined with asset turnover of 0.5x. Source: 10-Q filed 2025-11-05. Gross margin of 59.7% with operating margin at -2.2% reflects strong pricing power.
| Metric | AXON | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -8.9% | Red flag | Below sector median of 7.3% |
| Return on Equity (ROE) | 4.5% | Warning | Moderate equity returns |
| Gross Margin | 59.7% | Excellent | Strong pricing power |
| Operating Margin | -2.2% | Warning | Moderate operational efficiency |
Cash Flow: AXON ENTERPRISE, INC. generates $75.1M FCF at 2.7% margin, positive NaN/8 quarters
AXON ENTERPRISE, INC. generated $75.1M in free cash flow (TTM), a 2.7% FCF margin, a margin that ranks Bottom 50% in Industrials. Operating cash flow exceeds net income by 1.7x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-11-05.
| Metric | AXON | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 2.7% | Warning | Thin cash margins |
| Free Cash Flow (TTM) | $75.1M | Good | Positive cash generation |
| OCF/Net Income | 1.7x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: AXON ENTERPRISE, INC. at 0.6x leverage
AXON ENTERPRISE, INC.'s debt-to-equity ratio of 0.6x reflects moderate leverage. Total debt of $1.8B offset by $1.7B in cash. Source: 10-Q filed 2025-11-05.
| Metric | AXON | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.6x | Good | Moderate leverage |
| Net Cash Position | $-91.9M | Adequate | Net debt position |
Valuation: AXON ENTERPRISE, INC. trades at 355.0x earnings
AXON ENTERPRISE, INC. trades at a P/E of 355.0x. Free cash flow yield of 0.2% reflects market expectations for growth.
| Metric | AXON | Rating | Context |
|---|---|---|---|
| P/E Ratio | 355.0x | Warning | Premium valuation |
| EV/Sales | 15.9x | Warning | Growth premium priced in |
| FCF Yield | 0.2% | Warning | Lower cash yield |
Capital Allocation: AXON ENTERPRISE, INC. returns 0.0% shareholder yield
AXON ENTERPRISE, INC.'s total shareholder yield is 0.0% (dividends + buybacks). Source: 10-Q filed 2025-11-05.
| Metric | AXON | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 0.0% | Warning | Dividend + buyback yield combined |
| Total Capital Returned (TTM) | $0 | Adequate | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -8.9% | Bottom 10% | -1.2x below |
| Free Cash Flow Margin | 2.7% | Bottom 50% | 0.6x below |
| Gross Margin | 59.7% | Top 10% | 1.8x above |
| Operating Margin | -2.2% | Bottom 10% | -0.3x below |
| Return on Equity (ROE) | 4.5% | Bottom 50% | 0.5x below |
| P/E Ratio | 355.0x | N/A | - |
Financial Scorecard
| Metric | AXON | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -8.9% | Red flag | Below cost of capital |
| Free Cash Flow Margin | 2.7% | Warning | Bottom 50% of sector (median: 4.7%) |
| Gross Margin | 59.7% | Excellent | Top 10% of sector (median: 33.1%) |
| Debt to Equity Ratio | 55.8% | Good | Moderate leverage |
| P/E Ratio (Price-to-Earnings) | 355.0x | Warning | High expectations priced in |
| Free Cash Flow Yield | 0.2% | Red flag | Growth-focused valuation |
Frequently Asked Questions
Q: What is AXON ENTERPRISE, INC.'s Return on Invested Capital (ROIC)?
AXON ENTERPRISE, INC. (AXON) has a trailing twelve-month Return on Invested Capital (ROIC) of -8.9%. This compares below the sector median of 7.3%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is AXON ENTERPRISE, INC.'s Free Cash Flow Margin?
AXON ENTERPRISE, INC. (AXON) has a free cash flow margin of 2.7%, generating $75.1 million in free cash flow over the trailing twelve months. A thin FCF margin may indicate heavy reinvestment or operational challenges.
Q: Is AXON ENTERPRISE, INC. stock overvalued or undervalued?
AXON ENTERPRISE, INC. (AXON) trades at a P/E ratio of 355.0x, which is above the sector median of N/A. The EV/Sales multiple is 15.9x. Free cash flow yield is 0.2%, reflecting growth expectations priced into the stock.
Q: How much debt does AXON ENTERPRISE, INC. have?
AXON ENTERPRISE, INC. (AXON) has a debt-to-equity ratio of 0.6x with total debt of $1.8 billion. Net debt position is $91.9 million.
Q: What is AXON ENTERPRISE, INC.'s revenue and earnings growth?
AXON ENTERPRISE, INC. (AXON) grew revenue by 33.5% year-over-year. Earnings per share decreased by 68.3% compared to the prior year. Double-digit revenue growth indicates strong demand and market share gains.
Q: How does AXON ENTERPRISE, INC. compare to competitors in Industrials?
Compared to other companies in Industrials, AXON ENTERPRISE, INC. (AXON) shows: ROIC of -8.9% is below the sector median of 7.3% (-1.2x median). FCF margin of 2.7% trails the sector median of 4.7% (Bottom 39% of sector). Gross margin at 59.7% is 26.6 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Industrials companies with available SEC filings.
Q: What warning signs should I watch for with AXON ENTERPRISE, INC.?
Investors in AXON ENTERPRISE, INC. (AXON) should monitor these potential warning signs: 1) FCF margin is thin at 2.7%, leaving limited buffer for economic downturns. 2) ROIC has been declining, potentially signaling deteriorating competitive position. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-11-05. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.