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Why Buying the AXON Pre-Earnings Stock Dip Might be a Good Idea

Rhys NorthwoodSaturday, Feb 22, 2025 10:56 am ET
6min read

Axon Enterprise, Inc. (AXON) has been on a rollercoaster ride recently, with its stock price experiencing a significant dip following an analyst downgrade and partnership issues. However, the company's strong earnings growth and strategic initiatives may make it an attractive investment opportunity, especially ahead of its fourth-quarter 2024 earnings release. Let's explore why buying the AXON pre-earnings stock dip might be a good idea.



Strong Earnings Growth and Strategic Initiatives

Axon has demonstrated impressive earnings growth, with a projected earnings per share (EPS) increase of 27.8% year-over-year for 2024. The company's strategic initiatives, such as expanding its AI offerings and investing in new areas like drones and robotics, have contributed to this growth. These initiatives position Axon at the forefront of technological advancements in the public safety sector, driving demand for its products and services.

AXTI Basic EPS year-on-year growth value
Name
Date
Basic EPS year-on-year growth value
AXTAXTI
20240930
0.07


Undervalued Compared to Industry Peers

Despite its strong earnings growth, Axon's current valuation is relatively low compared to its industry peers. The company's price-to-earnings (P/E) ratio is 36.1, which is higher than its historical average of 35.5 but still lower than the average P/E ratio for the Aerospace & Defense industry (20.5). This undervaluation may present an opportunity for investors to buy the stock at a discount, given its strong fundamentals and growth prospects.

AXTI P/E(TTM)
Name
GICS Industry
Date
P/E(TTM)
AXTAXTI
Semiconductors & Semiconductor Equipment
20250221
-9.79


Earnings Surprises and Stock Price Performance

Axon has a history of positive earnings surprises, with an average surprise of 20.2% in the past four quarters. In the last reported quarter, Axon delivered an earnings surprise of 18.9%, which led to a 9.2% increase in the stock price the following day. While the current Earnings ESP (Expected Surprise Prediction) is 0.00%, and the Zacks Rank is 3 (Hold), the company's track record of earnings surprises suggests that it may still have the potential to beat expectations.

AXTI Revenue Surprise


Conclusion

Axon Enterprise, Inc. (AXON) has experienced a pre-earnings stock dip due to analyst downgrades and partnership issues. However, the company's strong earnings growth, strategic initiatives, and undervalued valuation compared to industry peers make it an attractive investment opportunity. While the current Earnings ESP and Zacks Rank suggest a potential earnings miss, Axon's history of positive earnings surprises and strong fundamentals may still lead to a positive earnings beat. Investors should consider buying the AXON pre-earnings stock dip, as the risk-reward profile tilts in their favor.
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02/26

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car12703
02/26
@Andrew ford 💸
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02/22

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Jera_Value
02/22
@KAYLA Ok bro
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Accomplished-Back640
02/22
Earnings surprise history = bullish vibes. 🚀
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dritu_
02/22
@Accomplished-Back640 What do you think about their AI strategy?
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werewere223
02/22
Holding $AXON long-term. Diversifying with AI and public safety is smart. 🚀
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CaseEnvironmental824
02/22
@werewere223 How long you been holding $AXON and what's your target?
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therealchengarang
02/22
Dips like these are buffet time. Strong fundamentals, undervalued, and upcoming earnings... Smells like opportunity.
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Just_Fox_5450
02/22
@therealchengarang How long you planning to hold AXON if you buy now? Just till earnings, or setting up a longer position?
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surveillance_raven
02/22
AI growth = 🔥 future. Holding $AXON long-term.
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greenpride32
02/22
$AXON got tech edge, but will it translate to numbers? Keep an eye on EPS and AI-driven segments.
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goodpointbadpoint
02/22
@greenpride32 AI edge? EPS might lie. Watch out.
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Mylessandstone69
02/22
@greenpride32 Tech edge could boost EPS. Let's see.
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bobbybobby911
02/22
AI growth is 🔥. $AXON undervalued? Maybe time to load up before earnings. Risky but potential 🤔
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Powerballs
02/22
Partnership drama = noise. Fundamentals = signal
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gnygren3773
02/22
@Powerballs True, fundamentals matter more.
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Stevitop
02/22
Dips create opportunity. Buy low, no FOMO.
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YungPersian
02/22
@Stevitop How long you holding AXON? Got any price target in mind?
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ZhangtheGreat
02/22
@Stevitop I had AXON, sold early. Regretted it when it surged. FOMO is real.
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conquistudor
02/22
Earnings surprise history looks solid. Holding $AXON long-term, but watching those partnership developments closely.
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alpha_mu
02/22
@conquistudor I had $AXON once, sold too early. Regretted it when it kept climbing. FOMO hits hard when misses like that happen.
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joaopedrosp
02/22
@conquistudor How long you planning to hold $AXON? Curious if you've got a target price in mind.
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