Axon Enterprise, Inc. (NASDAQ:AXON) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. The company beat both earnings and revenue forecasts, with revenue of US$256m, some 9.1% above estimates, and statutory earnings per share (EPS) coming in at US$0.76, 2,774% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the ten analysts covering Axon Enterprise are now predicting revenues of US$1.06b in 2022. If met, this would reflect a decent 14% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 25% to US$0.75. Before this earnings report, the analysts had been forecasting revenues of US$1.05b and earnings per share (EPS) of US$0.77 in 2022. The consensus analysts don’t seem to have seen anything in these results that would have changed their view on the business, given there’s been no major change to their estimates.
With no major changes to earnings forecasts, the consensus price target fell 6.2% to US$179, suggesting that the analysts might have previously been hoping for an earnings upgrade. The consensus price target is just an average of individual analyst targets, so – it could be handy to see how wide the range of underlying estimates is. The most optimistic Axon Enterprise analyst has a price target of US$223 per share, while the most pessimistic values it at US$145. As you can see, analysts are not all in agreement on the stock’s future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 20% growth on an annualised basis. That is in line with its 23% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 6.6% per year. So it’s pretty clear that Axon Enterprise is forecast to grow substantially faster than its industry.
The Bottom Line
The most obvious conclusion is that there’s been no major change in the business’ prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations – and our data suggests that revenues are expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Axon Enterprise going out to 2024, and you can see them free on our platform here..
Plus, you should also learn about the 3 warning signs we’ve spotted with Axon Enterprise .
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.