Unpacking Q3 Earnings: Axon (NASDAQ:AXON) In The Context Of Other Aerospace and Defense Stocks

Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Axon (NASDAQ:AXON) and its peers.

Emissions and automation are important in aerospace, so companies that boast advances in these areas can take market share. On the defense side, geopolitical tensions–whether it be Russia’s invasion of Ukraine or China’s aggression toward Taiwan–have highlighted the need for consistent or even elevated defense spending. As for challenges, demand for aerospace and defense products can ebb and flow with economic cycles and national defense budgets, which are unpredictable and particularly painful for companies with high fixed costs.

The 29 aerospace and defense stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 0.7% while next quarter’s revenue guidance was 0.6% below.

While some aerospace and defense stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.9% since the latest earnings results.

Axon (NASDAQ:AXON)

Providing body cameras and tasers for first responders, AXON (NASDAQ:AXON) develops technology solutions and weapons products for military, law enforcement, and civilians.

Axon reported revenues of $710.6 million, up 30.6% year on year. This print exceeded analysts’ expectations by 0.8%. Overall, it was a strong quarter for the company with a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ ARR estimates.

Axon pulled off the highest full-year guidance raise of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 23.2% since reporting and currently trades at $542.32.

We think Axon is a good business, but is it a buy today? Read our full report here, it’s free for active Edge members.

Best Q3: RTX (NYSE:RTX)

Originally focused on refrigeration technology, Raytheon (NSYE:RTX) provides a a variety of products and services to the aerospace and defense industries.

RTX reported revenues of $22.48 billion, up 11.9% year on year, outperforming analysts’ expectations by 5.4%. The business had a stunning quarter with an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ EBITDA estimates.

The market seems happy with the results as the stock is up 8.7% since reporting. It currently trades at $174.96.

Is now the time to buy RTX? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Redwire (NYSE:RDW)

Based in Jacksonville, Florida, Redwire (NYSE:RDW) is a provider of systems and components used in space infrastructure.

Redwire reported revenues of $103.4 million, up 50.7% year on year, falling short of analysts’ expectations by 21.7%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations and a significant miss of analysts’ revenue estimates.

Redwire delivered the fastest revenue growth but had the weakest full-year guidance update in the group. As expected, the stock is down 25.2% since the results and currently trades at $5.53.

Read our full analysis of Redwire’s results here.

Leidos (NYSE:LDOS)

Formed through the split of IT services company SAIC, Leidos (NYSE:LDOS) offers technology and engineering solutions such as military training systems for the defense, civil, and health markets.

Leidos reported revenues of $4.47 billion, up 6.7% year on year. This result surpassed analysts’ expectations by 4.1%. It was an exceptional quarter as it also recorded an impressive beat of analysts’ backlog estimates and a solid beat of analysts’ EBITDA estimates.

The stock is flat since reporting and currently trades at $191.21.

Read our full, actionable report on Leidos here, it’s free for active Edge members.

Curtiss-Wright (NYSE:CW)

Formed from a merger of 12 companies, Curtiss-Wright (NYSE:CW) provides a range of products and services to the aerospace, industrial, electronic, and maritime industries.

Curtiss-Wright reported revenues of $869.2 million, up 8.8% year on year. This number met analysts’ expectations. Overall, it was a strong quarter as it also put up a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EBITDA estimates.

The stock is down 5.6% since reporting and currently trades at $552.32.

Read our full, actionable report on Curtiss-Wright here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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