Axon Eyes Expansion in Drone Equipment Space: Can It Deliver Growth?

Axon Enterprise, Inc. AXON has been focusing on strategic collaborations with other companies to expand its drone offerings and customer base. For instance, in June 2024, Axon entered into a partnership with Skydio (a leading U.S. drone manufacturer) to introduce a comprehensive line of drones in public safety that includes a scalable Drone as First Responder (DFR) solution.

The offering incorporates autonomous drones, onsite docking stations and integrated flight control solutions from Skydio and real-time operations, real-time crime center capabilities and evidence management solutions from Axon. The combined offering supports Axon’s DFR programs across its customer base and strengthens its market position in this category.

Also, in October 2024, the company acquired Dedrone, a global leader in airspace security. The inclusion of Dedrone’s advanced airspace technology boosted AXON's capability to enable customers to protect their communities against drone threats and improve response to critical incidents. In addition, Axon continues to invest in and support DroneSense, an Axon ecosystem partner and leading provider of Drone software.

With growing instances of terrorism and criminal activities globally, the demand for advanced public safety technologies is expected to remain strong going forward. This is likely to support the ongoing demand for AXON’s drone equipment, positioning it well for sustained momentum in the quarters ahead.

Performance of AXON's Peers

Among its major peers, Woodward, Inc.’s WWD Industrial business segment reported net sales of $321.9 million in the second quarter of fiscal 2025, down 4.7% year over year. Woodward generated 36.4% of its total sales from this segment in the quarter. The decline in revenues for Woodward’s segment is primarily due to lower on-highway volume in China.

Its another peer, Teledyne Technologies Incorporated’s TDY Digital Imaging segment’s first-quarter 2025 revenues increased 2.2% year over year to $757 million. Higher revenues were augmented by increased demand for Teledyne’s commercial infrared imaging components and surveillance systems. Teledyne generated 52.2% of its total revenues from this segment in the quarter.

AXON’s Price Performance, Valuation and Estimates

Shares of Axon have gained 130.2% in the past year compared with the industry’s growth of 47.5%.

From a valuation standpoint, AXON is trading at a forward price-to-earnings ratio of 99.45X, above the industry’s average of 51.68X. Axon carries a Value Score of F.

The Zacks Consensus Estimate for AXON’s 2025 earnings has increased a penny over the past 30 days.

The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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