Portfolio: Zacks Focus List

Axon Enterprise presents a compelling investment opportunity driven by consistent high-growth financials, expanding market share, and a transformative shift toward recurring revenue models. The company has demonstrated exceptional financial performance while building a formidable competitive moat through its integrated ecosystem of law enforcement technologies. While the company is best known for the TASER branded lineup of personal protection products, it has successfully diversified into a comprehensive technology platform encompassing body-worn cameras, dashcams, computer-aided dispatch software, and Evidence.com, a cloud-based digital evidence platform. This strategic pivot has transformed Axon from a hardware manufacturer into a software-as-a-service (SaaS) provider with recurring revenue streams.

The company beat Q1 revenue and earnings expectations, posting 31% revenue growth YoY, which was now the 13th consecutive month of posting YoY revenue growth exceeding 25%. Management also lifted the full year outlook for 2025, and shares responded strongly with a +14% move following the results. While up significantly following the earnings report, shares have remained flat for the past six months. We think this sideways move was healthy to digest the torrent of positive news and allow the fundamentals to catch up, but now look primed for a breakout with yet another strong outlook for demand for the company’s products due to its unique flywheel of network effects and integrated ecosystem.