Here's Why Axon Enterprise (AXON) Fell More Than Broader Market

Axon Enterprise (AXON) ended the recent trading session at $490.00, demonstrating a -3.05% change from the preceding day's closing price. This move lagged the S&P 500's daily loss of 0.48%. Meanwhile, the Dow lost 0.77%, and the Nasdaq, a tech-heavy index, lost 0.64%.

Heading into today, shares of the maker of stun guns and body cameras had lost 20.57% over the past month, lagging the Aerospace sector's loss of 11.13% and the S&P 500's loss of 0.97%.

The upcoming earnings release of Axon Enterprise will be of great interest to investors. The company's earnings per share (EPS) are projected to be $1.95, reflecting a 66.67% increase from the same quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $935.35 million, showing a 31.62% escalation compared to the year-ago quarter.

For the full year, the Zacks Consensus Estimates are projecting earnings of $7.88 per share and revenue of $3.68 billion, which would represent changes of +15.04% and +32.42%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Axon Enterprise. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Axon Enterprise is currently a Zacks Rank #3 (Hold).

In terms of valuation, Axon Enterprise is currently trading at a Forward P/E ratio of 64.12. This indicates a premium in contrast to its industry's Forward P/E of 35.87.

It is also worth noting that AXON currently has a PEG ratio of 2.56. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. By the end of yesterday's trading, the Aerospace - Defense Equipment industry had an average PEG ratio of 2.25.

The Aerospace - Defense Equipment industry is part of the Aerospace sector. This group has a Zacks Industry Rank of 44, putting it in the top 18% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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

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