Strength in Connected Devices Unit Drives Axon: Can the Momentum Sustain?

Axon Enterprise, Inc. AXON is thriving on the back of persistent strength in its Connected Devices segment. The company continues to witness growing popularity for its next-generation TASER 10 products, whose shipment began in 2023. Growth in cartridge revenues, driven by the higher adoption of TASER 10 handles, has been driving the segment’s performance. Revenues from TASER devices increased 19% year over year in the first quarter of 2025.

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

AXON’s Connected Devices segment is also benefiting from increased warranty revenues from a higher volume of deployed devices in the field. Driven by solid demand for its products, the segment’s revenues increased 26.1% year over year in first-quarter 2025.

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 Connected Devices portfolio, positioning the segment well for sustained momentum in the quarters ahead.

Segment 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 38.9% in the past six months compared with the industry’s growth of 22.6%.

From a valuation standpoint, AXON is trading at a forward price-to-earnings ratio of 111.71X above the industry’s average of 47.16X. Axon carries a Value Score of F.

The Zacks Consensus Estimate for AXON’s second-quarter 2025 earnings has increased 4.8% 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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