Axon's Connected Devices Unit Gains Momentum: Can It Sustain?

Axon Enterprise, Inc. AXON is witnessing robust momentum in its Connected Devices segment. The company continues to witness growing popularity for its next-generation TASER 10 products, whose shipment began in 2023. Increase in cartridge revenues, supported by the higher adoption of TASER 10 handles, has been augmenting the segment’s results. Revenues from TASER devices increased 19% year over year in the second quarter of 2025.

In April 2023, the company introduced its next-generation body-worn camera, Axon Body 4. With upgraded features such as a bi-directional communications facility and a point-of-view camera module option, this body camera is experiencing strong orders, boosting the segment’s growth. Shipment of this body camera began in June 2023 and the customer response has been impressive so far.

The company’s Connected Devices segment is also gaining from growth in warranty revenues from a higher volume of deployed devices in the field. Driven by solid demand for its products, the segment’s revenues increased 28.6% year over year in second-quarter 2025.

The demand for Axon’s advanced public safety technologies is expected to remain strong due to growing instances of terrorism and criminal activities globally. This is likely to drive demand for AXON’s Connected Devices portfolio, positioning the segment well for sustained growth in the quarters ahead.

Segment Snapshot of AXON's Peers

Among its major peers, Kratos Defense & Security Solutions, Inc.’s KTOS Government Solutions segment’s second-quarter 2025 revenues increased 29.9% year over year to $278.3 million. This was driven by higher sales of Kratos Defense’s businesses, with the most notable growth in its C5ISR, Defense Rocket Support and Microwave Products units. Kratos Defense derived 79.2% of its total revenues from this segment during the quarter.

Another peer, Teledyne Technologies Incorporated’s TDY Digital Imaging segment’s second-quarter 2025 revenues increased 4.3% year over year to $771 million. Higher revenues were augmented by increased demand for Teledyne’s unmanned air systems and commercial infrared imaging components. Teledyne generated 50.9% of its total revenues from this segment in the quarter.

AXON’s Price Performance, Valuation and Estimates

Shares of Axon have gained 96.3% in the past year compared with the industry’s growth of 35.6%.

From a valuation standpoint, AXON is trading at a forward price-to-earnings ratio of 96.06X, above the industry’s average of 48.20X. Axon carries a Value Score of F.

The Zacks Consensus Estimate for AXON’s 2025 earnings has been on the rise over the past 60 days.

The company currently carries a Zacks Rank #3 (Hold). 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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