Axon makes the TASER, the body cameras most U.S. police wear, and the cloud software that stores and analyses the video. It is now adding AI on top: report writing, transcription and real-time translation through the camera. Revenue has grown more than 30% for ten straight quarters, yet the shares are down about half from their 2025 peak.
Today’s close against the report’s numbers, updated every weekday. The analysis is as of October 21, 2026; the rating as of October 22, 2026. Both change only when the report is revised.
The scenario model’s bear-to-bull range, the probability-weighted value, the price, its 52-week range and the analysts’ average target. The copper line marks the base case; the fine dotted line is today’s close.
Written on October 21, 2026, ahead of its third-quarter results on November 3. Figures are from the company’s filings and releases unless noted. Not investment advice. The author holds no AXON shares.
Axon sells two things. Connected Devices (56% of revenue) are TASER energy weapons, Axon Body cameras, in-car and fixed cameras, drones and, since buying Dedrone in 2024, counter-drone systems. Software & Services (44%) is Axon Evidence, the cloud where agencies store and share footage, plus records, dispatch and AI tools. Devices are sold inside five- to ten-year bundles, so about 95% of revenue is tied to subscription plans and customers rarely switch.
The AI Era Plan, an add-on of about $199 per officer a year, includes Draft One (police reports written from camera audio), transcription and real-time translation. Revenue from it grew almost 700% in the past year.
Second-quarter revenue beat estimates by about $28 million. TASER grew 21%, and Platform Solutions (drones, counter-drone, fixed cameras) more than doubled, with Dedrone passing $100 million in the quarter. Management raised 2026 growth guidance to 32–34% and set 2028 targets of $6 billion of revenue and a 28% adjusted EBITDA margin.
The shares fell anyway. The software gross margin dropped about four points to 71.3% as services and new products grew, memory chips raised camera costs, and free cash flow was roughly zero. In September Axon sold $1 billion of 0% convertible notes, which investors read as a sign of dilution ahead. Results for the third quarter come on November 3.
| FY2021 | FY2022 | FY2023 | FY2024 | FY2025 | TTM Jun 2026 | |
|---|---|---|---|---|---|---|
| Revenue | $863M | $1,187M | $1,561M | $2,083M | $2,780M | $3,219M |
| Operating margin | −19.5% | 7.8% | 10.0% | 2.8% | −2.2% | 0.7% |
| Net income | −$60M | $147M | $176M | $377M | $125M | $199M |
| Operating cash flow | $124M | $235M | $189M | $408M | $211M | $266M |
| Capital spending | $50M | $56M | $60M | $79M | $136M | $133M |
| Free cash flow | $75M | $180M | $130M | $330M | $75M | $133M |
GAAP profit is small because stock-based pay is very large: guided at $590–620 million in 2026, about 16% of revenue, including a one-off CEO award. Adjusted EBITDA adds that back, which is why the two measures tell such different stories. The quarterly view shows each quarter from the 10-Qs.
Real-time translation already ships. Through Axon Assistant, an officer presses a button on an Axon Body 4 or Body Mini camera, picks a language (or lets it detect one), and the camera speaks the translation aloud; the reply is translated back into English. It covers more than 50 languages and became generally available on August 1, 2025. Frederick, Maryland, ran 1,027 translated conversations in five weeks of testing; officers said quality varied by language, and certified interpreters are still used for investigations.
The economics are what matter for the stock. Translation is sold inside the AI Era Plan rather than as a separate device, so its value shows up as higher revenue per officer on a camera base Axon already owns. In the U.S. about one in five people speaks a language other than English at home, so the feature is useful on almost every shift, which helps agencies justify the upgrade.
Military and federal use is a real but early opportunity. Federal agencies added more than 22,000 body cameras and evidence licenses in 2026, the VA bought TASER 10s, and in October DHS selected Dedrone for counter-drone protection. Axon does not report military revenue separately, and armed forces have their own translation programs and suppliers, so this report treats military translation as upside rather than part of the base case.
Takeaway. Translation is a strong reason to upgrade, but it is a feature Axon sells to customers it already has, not a new product line. It supports the 2028 targets more than it changes them.
Valued on 2030 earning power like the other fast growers here, using operating margin after stock-based pay, discounted at 11% a year (beta 1.44 gives a CAPM cost of about 11.6%, trimmed slightly for the subscription base). Net debt of about $1.1 billion, 88 million shares by 2030 and the free cash flow earned along the way (a straight line from about $0.1 billion this year to 80% of 2030 after-tax profit) are included.
| Bear | Base | Bull | |
|---|---|---|---|
| Revenue in 2030 | $6.5B | $8.5B | $10.5B |
| Operating margin after stock pay | 15% | 20% | 25% |
| Exit multiple | 25× | 30× | 35× |
| Value per share | $147 | $314 | $567 |
| Probability | 25% | 50% | 25% |
Weighted 25/50/25: $335. The base case is close to management’s own path: $6 billion in 2028, then about 19% growth a year.
Every figure in this valuation comes from one model script, rerun and checked against this page each time the site is built. The XLSX model rebuilds it in live formulas: change any blue input and every year’s cash flow, the bridge to the value, the scenarios and the sensitivity table recalculate.
| To justify the price, you need | Against |
|---|---|
| About $10.7 billion of revenue in 2030 at the base margin and multiple | Management’s path reaches about $8.5 billion |
| Or margins of about 25% after stock pay with base revenue | About 5% today, 20% in the base case |
After a 50% fall the stock is far cheaper than it was, but it still prices in growth beyond the company’s own targets. Analysts’ average target of $691 assumes faster growth and a higher multiple.
| Risk | Why it matters |
|---|---|
| Stock-based pay | About 16% of revenue in 2026; dilution is the main cost to shareholders. |
| Margins | Software gross margin fell four points; memory costs hit cameras until about 2028. |
| Budgets and politics | Police budgets, federal policy and privacy debates (drones, licence-plate readers) can slow orders. |
| AI accuracy | Translation and report-writing errors could create legal problems in court. |
| Valuation | Still about 44× next year’s earnings. |
Upside: AI Era Plan adoption across the installed base, counter-drone demand, international bookings (which tripled), enterprise customers and federal or military contracts.
Axon has a near-monopoly in U.S. police cameras, sticky subscriptions and a fast-growing AI product line. The price assumes growth beyond the company’s own targets.
What would change the value: Third-quarter results on November 3, especially margins after stock pay, are the next test.
Ranges, not three cases. The expected value is the average of 4,000 runs of this report’s own model, with every input drawn from a range: the base case is the middle, and the bear and bull cases are the 10th and 90th percentiles. Business inputs move together; the discount rate moves on its own. The 25/50/25 weighting in the valuation section gives $335. How the ranges work
Two different questions. The rating is relative: it asks whether the stock is cheaper or dearer than the S&P 500 on the same assumptions. The absolute view asks whether it is worth its price at all: on its own the stock trades above our estimated value, which is 16% below the price.
On the same assumptions every report uses (a 5.15% Treasury yield and a 4.5% equity premium), the S&P 500 itself is worth about 68% of its price. The rating compares each stock with that: Buy if it is at least 15% cheaper than the market on this basis, Sell if at least 15% dearer, Hold in between. It is the same rule for every company, whoever owns it. The rating depends on that assumption: it would be Buy if the index grows 6% a year and Hold at 10%, against 8% here. How ratings work
Against the Street: Analysts average about $691, assuming faster growth than the company’s own path and a higher multiple. This model follows management’s path to about $8.5 billion of 2030 revenue.
| Measure | Axon Enterprise | Industry median | Rank | |
|---|---|---|---|---|
| Revenue growth, last fiscal year | 33.5% | 9.8% | 2 of 12 | Better than the median |
| Operating margin | 0.7% | 10.6% | 12 of 12 | Worse than the median |
| Price to earnings | 178.6× | 23.1× | 12 of 12 | Worse than the median |
| Free cash flow yield | 0.4% | 3.5% | 10 of 12 | Worse than the median |
Peers: the 11 other S&P 500 companies in Aerospace & Defense with complete data (BA, GD, GE, HII, HWM, LHX, LMT, NOC, RTX, TDG, TXT). Last twelve months where reported, from SEC filings; prices from the latest close. A lower price-to-earnings ratio ranks higher. These figures update with each data run; the rating does not.
AI makes Axon’s subscription more valuable; the stock already assumes much of that.
| What | Figures | Source |
|---|---|---|
| Latest results | $904M (Revenue, Q2 2026, +35%), $1.64B (Annual recurring revenue, +39%), 126% (Net revenue retention), $15.1B (Future contracted bookings, +41%) and others | Q2 2026 results; Q2 slides and reaction; Convertible notes |
| The numbers (five-year table) | Five years of annual figures and the last twelve months | SEC XBRL company facts; latest: 10-K for the period to 2025-12-31, 10-Q for the period to 2026-06-30 |
| Price at writing | $396.30 (Midday, Oct 21, 2026) | Yahoo Finance; the time of the quote is stated beside the price |
| Discount rate inputs | 10-year Treasury 5.15%, equity risk premium 4.5% | Fixed for every report so they can be compared; How ratings work |
| Valuation | Every value, case and sensitivity | This site’s model: XLSX, CSV |
| Checked by hand | Not yet | Reports are added to the audit log as they are revised |
| Input | Bear (10th percentile) | Base (median) | Bull (90th percentile) |
|---|---|---|---|
| Revenue, target year | $6B | $8B | $10B |
| Margin, target year | 15.0% | 20.0% | 25.0% |
| Exit multiple | 25× | 30× | 35× |
| Simulation result | |
|---|---|
| Expected value (average of 4,000 runs) | $331.51 |
| Likely range, 10th to 90th percentile | $165.34 to $523.69 |
| Median | $312.31 |
| Chance the value is above the price | 28% |
| Chance it is cheaper than the S&P 500 | 63% |
Each input is drawn from a split normal: its bear and bull values are the 10th and 90th percentiles, so the two sides can differ. Business inputs share a common factor (correlation 0.6); the discount rate is the same in every case, so it is not drawn. Inputs not listed are held at their base value. How the simulation works.