AXON
Axon Enterprise, Inc.
Industrials · Aerospace & Defense · United States · Stock
Score Breakdown
Scored for Aggressive Growth profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- Strong revenue growth of +33.5% year-over-year earned partial credit, but the steep -66.9% decline in net income and negative operating margin heavily penalized the overall score.
- Persistent operating losses across most of the trailing four quarters limited the momentum score despite consistent revenue acceleration.
- The absence of any dividend payment and no assigned macro theme meant zero credit from those two factors, dragging the composite score lower.
Why Not Higher
- The FY2025 operating margin of -2.2% and a net margin of only 4.5%, combined with erratic and mostly negative operating income across 2025Q2–2025Q4, prevented a higher profitability or momentum score.
- With no dividend history and no thematic tailwind credit, two full scoring factors contributed nothing to the total, capping the composite score.
Data Confidence
7 / 10
High — most data fields present
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2024's $2,082,526,000 to FY2025's $2,779,536,000, a gain of +33.5%. However, net income fell sharply from FY2024's $377,034,000 to FY2025's $124,656,000 (-66.9%), and diluted EPS declined from $4.80 in FY2024 to $1.51 in FY2025 (-68.5%).
The model rewarded the strong top-line expansion but penalized the steep deterioration in bottom-line profitability, producing a mid-range score that reflects the tension between accelerating revenue and collapsing earnings.
In FY2025, Axon reported a net margin of 4.5%, an operating margin of -2.2%, and a return on assets of 1.8%, indicating that the company is generating only thin net profits while operating activities are running at a loss.
The negative FY2025 operating margin and low return on assets signal that costs are outpacing core business revenues, which the model penalized heavily, resulting in a low profitability score.
In FY2025, Axon carried a debt-to-equity ratio of 0.56 and reported total assets of $7,000,313,000, suggesting a moderately leveraged balance sheet with a substantial asset base.
The relatively low debt-to-equity ratio indicates the company is not heavily reliant on debt financing, which the model rewarded with a strong financial health score.
Quarterly revenue showed a steady upward trend from $668,538,000 in 2025Q2 to $807,345,000 in 2026Q1. However, operating income remained negative or near zero across 2025Q2 through 2025Q4 (-$1,036,000, -$2,129,000, and -$50,118,000 respectively), before recovering to $29,243,000 in 2026Q1. Net income was similarly volatile, swinging from $36,117,000 in 2025Q2 to -$2,186,000 in 2025Q3 and $2,745,000 in 2025Q4, then surging to $169,312,000 in 2026Q1.
The model recognized the consistent revenue acceleration but was constrained by the persistent operating losses and erratic net income across most of the trailing four quarters, limiting the momentum score to a below-average level despite the 2026Q1 recovery.
Axon Enterprise does not currently pay a dividend and has no mapped dividend history, making it a genuine non-payer rather than a case of missing data.
Because the model rewards income generation through dividends, the complete absence of any dividend payment results in the lowest possible score for this factor.
Axon Enterprise is not currently assigned to any of the 24 tracked macro themes in the model.
The absence of a theme assignment means the security did not receive any thematic tailwind credit under the model's current methodology; this is a neutral classification rather than a negative signal.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Axon Enterprise delivered strong top-line growth of +33.5% year-over-year, with revenue rising from $2.08 billion in FY2024 to $2.78 billion in FY2025, but this was overshadowed by a sharp collapse in profitability, with net income falling -66.9% and diluted EPS dropping -68.5% over the same period. The company's FY2025 operating margin turned negative at -2.2% and net margin compressed to just 4.5%, signaling that cost growth is outpacing revenue expansion. On the positive side, the balance sheet remains moderately healthy with a debt-to-equity ratio of 0.56 and a substantial asset base of $7.0 billion. The overall picture is one of a high-growth company under significant profitability pressure, warranting a cautious Monitor Only stance.
Plain English
Axon is growing its sales fast — up about a third in one year — but it's spending so much that profits have cratered, and the company is actually losing money from its core operations, which makes it a risky bet right now.
Bull Case vs. Bear Case
Bull Case
- Revenue grew +33.5% year-over-year from $2.08 billion to $2.78 billion, demonstrating strong and accelerating top-line demand for Axon's products and services.
- Quarterly revenue has risen consistently from $668.5 million in 2025Q2 to $807.3 million in 2026Q1, showing sustained commercial momentum.
- The balance sheet is moderately healthy, with a debt-to-equity ratio of just 0.56 and total assets of $7.0 billion, providing financial flexibility.
Bear Case
- Net income collapsed -66.9% from $377 million in FY2024 to $125 million in FY2025, and diluted EPS fell -68.5%, signaling that revenue growth is not translating to shareholder returns.
- The FY2025 operating margin turned negative at -2.2%, meaning core business operations are running at a loss and costs are outpacing revenues.
- Operating income was negative or near zero for three consecutive quarters (2025Q2 through 2025Q4), and net income was highly erratic, including a loss in 2025Q3, reflecting deep earnings instability.
What Could Change the Picture
Bullish Triggers
- A sustained return to positive and growing operating income — building on the 2026Q1 recovery to $29.2 million — would suggest the profitability pressure is temporary and the business is scaling effectively.
- If net margin expands meaningfully above the current 4.5% while revenue continues its upward trajectory, it would indicate that cost discipline is improving alongside top-line growth.
Bearish Triggers
- If operating losses deepen beyond the -$50.1 million seen in 2025Q4 or net income turns persistently negative, it would signal that the cost structure is fundamentally unsustainable.
- A deceleration in quarterly revenue growth from the current trajectory — which reached $807.3 million in 2026Q1 — would remove the primary bull case and heighten concerns about the earnings collapse.
Risk Profile
High RiskAxon's risk profile is elevated primarily because operating income was negative or near zero for three of the last four reported quarters, and net income swung from a gain to a loss and back, reflecting significant earnings volatility. While the debt-to-equity ratio of 0.56 and total assets of $7.0 billion suggest the balance sheet is not under immediate stress, the persistent operating losses introduce meaningful uncertainty about the company's near-term financial trajectory.
Key Catalysts to Watch
The recovery of operating income to $29.2 million and net income to $169.3 million in 2026Q1 could represent an early inflection point, though it follows several quarters of losses and remains to be confirmed as a durable trend.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.