Core Viewpoint - The industrials sector has shown strong performance in 2025, outperforming the benchmark, driven by factors such as reshoring, technological advancements, and market rotation towards cyclical industries [1][2][4]. Group 1: Sector Performance - The industrials sector, represented by the Industrial Select Sector SPDR ETF (XLI), has gained 5.2% in 2025, compared to the benchmark's 4.3% [1]. - The sector's current technical setup indicates potential for further upside, as it has consolidated for nearly a month and is nearing a breakout [1]. - Strong inflows into the sector and a bullish market setup contribute to its outperformance [2]. Group 2: Key Drivers - Reshoring trends are a significant driver, with manufacturing returning to domestic markets due to geopolitical stability concerns and favorable government policies [2]. - Technological advancements in automation, electric vehicles, and renewable energy infrastructure are increasing demand for industrial products [3]. - Government investments in infrastructure and defense spending are providing strong support for the sector [3]. Group 3: Notable Companies - Axon Enterprise has surged 19.4% YTD, significantly outperforming both the sector and the broader market, with a strong upcoming earnings report expected [6][8]. - General Electric (GE) has gained nearly 26% YTD and 80% over the past year, driven by its leadership in aviation systems and impressive earnings performance [9][10]. - RTX has gained nearly 7% YTD, outpacing the industrial sector and broader market, with solid earnings performance and potential for long-term growth [11][12]. Group 4: Market Dynamics - There has been a market rotation from high-growth technology stocks to cyclical industries like industrials, enhancing the attractiveness of the XLI ETF [4]. - The XLI ETF features a low expense ratio of 0.09% and a dividend yield of 1.16%, which further attract capital inflows [4]. - Despite sensitivity to economic cycles and global trade dynamics, the sector is supported by technological innovation and policy support [5].

Core Viewpoint - Axon Enterprise, Inc. is set to release its fourth-quarter 2024 results on February 25, with earnings expected to show significant year-over-year growth in both earnings per share and revenues [1][2][3]. Financial Performance - The Zacks Consensus Estimate for Q4 earnings is $1.51 per share, reflecting a 34.8% increase from the previous year, while revenues are projected at $567.6 million, indicating a 31.3% year-over-year growth [1][2]. - For the full year 2024, revenue estimates stand at $2.08 billion, representing a 32.8% increase year-over-year, and earnings per share are expected to reach $5.29, up 27.8% from the prior year [3]. Segment Performance - The TASER segment is anticipated to generate revenues of $217 million in Q4, marking a 34.8% increase year-over-year, driven by strong demand for TASER devices and virtual reality training services [6]. - The Software & Sensors segment is expected to report revenues of $221.9 million, reflecting a 35% increase from the prior-year quarter, supported by the growing user base and adoption of software applications [8]. - Investments in AI products, drones, and robotics are likely to enhance market share, with strategic partnerships, such as the one with Skydio, expected to bolster product offerings in public safety [9][10]. Cost and Margin Challenges - Axon faces challenges from rising costs related to business integration, increased headcount, and stock-based compensation, which have negatively impacted margins, with a gross margin decline of 180 basis points year-over-year in the first nine months of 2024 [11]. - Supply chain constraints, particularly for electronic components, are expected to inflate costs and delay product deliveries, while foreign currency fluctuations may also affect profitability [12]. Stock Performance and Valuation - AXON shares have increased by 45.4% over the past six months, outperforming both the Zacks Aerospace - Defense Equipment industry and the S&P 500 [13][14]. - The stock is currently trading at a forward P/E ratio of 80.93X, significantly higher than the industry average of 36.35X, raising concerns about potential overvaluation [16]. Investment Outlook - Axon is well-positioned with a diversified product portfolio and strong growth prospects in safety, drones, and robotics markets, supported by strategic collaborations and investments [17]. - However, near-term challenges related to operating costs and supply chain issues may impact margin performance [18].

Core Viewpoint - Axon Enterprise, Inc. is experiencing a downtrend in its stock price, which began after a downgrade, and is currently testing support levels that may break, leading to a potential rapid decline in stock price [1][5]. Group 1: Stock Performance - The stock is trading lower, continuing a downtrend that started on Wednesday after a downgrade [1]. - Axon shares opened at $540 on November 8 and closed above $600, indicating a significant price movement [4]. - The stock may gap down from previous levels, specifically from $540 to $465.50, if support breaks [6]. Group 2: Market Psychology - Support levels in the market often form due to psychological factors, particularly seller's remorse, where sellers regret their decision to sell as the stock price increases [2]. - Many sellers who sold at lower prices are placing buy orders at those same prices, contributing to the formation of support [5]. - The concentration of buy orders from regretful sellers can create a floor under the stock price, but if this support is broken, the stock may fall quickly [5].

Core Viewpoint - Axon Enterprise (AXON) is expected to report strong quarterly earnings and revenue growth, with analysts predicting earnings of $1.51 per share and revenues of $567.56 million, reflecting year-over-year increases of 34.8% and 31.3% respectively [1] Earnings Projections - The consensus EPS estimate for the quarter has remained unchanged over the past 30 days, indicating a stable outlook from analysts [1] - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [2] Revenue Estimates - Analysts forecast 'Net Sales- Software and Sensors' to reach $350.43 million, representing a year-over-year increase of 29.4% [3] - The consensus estimate for 'Revenue- TASER' is $217.30 million, indicating a 34.7% increase year over year [4] - 'Net Sales- Services- Software and Sensors' is expected to be $222.21 million, reflecting a 35.8% year-over-year change [4] - 'Net Sales- Products- Software and Sensors' is projected to reach $129.70 million, showing a 21% increase from the prior-year quarter [4] Product Sales Estimates - 'Net Sales- Products- TASER' is anticipated to be $201.48 million, indicating a 33.2% increase year over year [5] - The estimate for 'Net Sales- Services- TASER' stands at $14.33 million, reflecting a 41.8% year-over-year change [5] - 'Net Sales- Products' is expected to total $332.80 million, showing a 28.8% increase from the previous year [5] Additional Sales Metrics - 'Net Sales- Services' is projected to reach $233.19 million, indicating a 34.2% increase from the year-ago quarter [6] - 'Net Sales- Products- TASER- Extended warranties' is estimated at $9.71 million, reflecting an 18% increase year over year [6] - 'Net Sales- Products- TASER- Other' is expected to be $6.71 million, indicating a significant 50.1% increase from the prior-year quarter [6] Segment Performance - 'Net sales by Product- Software and Sensors segment- Axon Body' is expected to be $74.74 million, reflecting a 26.8% increase from the prior-year quarter [7] - 'Annual recurring revenue' is projected to reach $940.51 million, up from $697 million reported in the same quarter last year [7] Stock Performance - Shares of Axon have decreased by 2.3% over the past month, contrasting with a 2.6% increase in the Zacks S&P 500 composite [8] - With a Zacks Rank 3 (Hold), AXON is expected to perform in line with the overall market in the near future [8]

Core Points - Axon will report its fourth quarter 2024 financial results on February 25, 2025, after market close [1] - A live Zoom webinar will be held at 5 p.m. ET on the same day to discuss the financial results [1][2] - An archived replay of the webinar will be available after the call [2] Upcoming Events - Axon will participate in the Morgan Stanley Technology, Media & Telecom Conference on March 3, 2025 [3] Company Overview - Axon is a leader in global public safety technology, aiming to reduce gun-related deaths between police and the public by 50% by 2033 [4] - The company is developing a comprehensive public safety operating system that includes hardware devices and cloud software solutions [4] - Axon's product suite includes TASER devices, body cameras, in-car cameras, digital evidence management solutions, and productivity software [4] - The company serves a diverse customer base, including law enforcement, fire services, corrections, emergency medical services, and the justice sector [4]

Company Performance - Axon Enterprise (AXON) closed at $665.08, reflecting a -0.62% change from the previous session, underperforming the S&P 500's daily loss of 0.27% [1] - Over the past month, shares of Axon have increased by 15.43%, outperforming the Aerospace sector's gain of 4.52% and the S&P 500's gain of 4.27% [2] Upcoming Earnings - The company is expected to report an EPS of $1.51, representing a 34.82% increase from the prior-year quarter, with a consensus revenue estimate of $567.56 million, indicating a 31.34% increase from the same quarter last year [3] Analyst Projections - Recent shifts in analyst projections for Axon Enterprise should be monitored, as upward revisions indicate analysts' positive outlook on the company's business operations and profit generation capabilities [4] Valuation Metrics - Axon Enterprise has a Forward P/E ratio of 103.03, significantly higher than the industry average of 30.7, and a PEG ratio of 3.46 compared to the industry average of 2.47 [7] Industry Context - The Aerospace - Defense Equipment industry, which includes Axon, has a Zacks Industry Rank of 138, placing it in the bottom 46% of over 250 industries, suggesting that the industry is underperforming compared to the top half [8]

Group 1 - Axon Enterprise is part of the Aerospace group, which consists of 51 companies and is currently ranked 6 in the Zacks Sector Rank [2] - The Zacks Rank system indicates that Axon Enterprise has a Zacks Rank of 2 (Buy), suggesting a favorable outlook for the stock [3] - Over the past 90 days, the Zacks Consensus Estimate for Axon's full-year earnings has increased by 2.2%, indicating improved analyst sentiment [4] Group 2 - Year-to-date, Axon Enterprise has returned approximately 9.7%, significantly outperforming the average return of 2.9% for Aerospace companies [4] - In comparison, RTX has achieved a year-to-date return of 11.4% and also holds a Zacks Rank of 2 (Buy) [5] - Axon Enterprise belongs to the Aerospace - Defense Equipment industry, which includes 26 companies and has an average gain of 1.1% this year, further highlighting Axon's strong performance [6] Group 3 - Investors should monitor both Axon Enterprise and RTX for potential continued strong performance in the Aerospace sector [7]

Defense stocks were in focus after the inauguration of U.S. President Donald Trump, and could present an intriguing opportunity for investors looking to extend Wall Street's tailwinds into February. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, Axon Enterprise Inc (NASDAQ:AXON) and Northrop Grumman Corp (NYSE:NOC) are among the best names to own next month.AXON and NOC averaged impressive February gains of 8% and 4.1% over the past 10 years, respectively, both finishing higher ...

Core Viewpoint - Axon Enterprise, Inc. has experienced significant stock price appreciation, outperforming both the industry and the S&P 500, driven by strong demand in its TASER segment and strategic investments in technology [1][5][9]. Stock Performance - Axon's shares have surged 97.5% over the past six months, compared to the industry growth of 18.3% and S&P 500's 12.4% [1]. - The stock closed at $610.32, below its 52-week high of $698.67 and above its 52-week low of $247.04, indicating solid upward momentum [3]. Business Drivers - The TASER segment has seen a revenue increase of 32.1% year-over-year in the first nine months of 2024, driven by strong demand for TASER devices and virtual reality training services [5]. - The Software & Sensors segment's revenues increased by 34.2% in the same period, supported by a growing user base and higher average revenue per user [7]. - The introduction of the Axon Body 4 camera in April 2023 has generated significant demand, further bolstering segment growth [8]. Financial Outlook - Axon projects revenues of $2.07 billion for 2024, reflecting a year-over-year growth of approximately 32%, with adjusted EBITDA expected to reach $510 million [9]. - The company's trailing 12-month return on equity (ROE) stands at 20.42%, significantly higher than the industry average of 10.93% [11]. Earnings Estimates - Earnings estimates for 2024 remain stable at $5.29 per share, while estimates for 2025 have increased by 0.3% to $6.50 per share [14]. Valuation Concerns - Axon's forward 12-month price-to-earnings (P/E) ratio is 92.48X, considerably higher than the industry average of 38.22X, which may pose risks if market sentiment declines [16]. Strategic Acquisitions - The company has made strategic acquisitions, including Dedrone and Fusus, to enhance its product offerings and expand its market presence [10]. Growth Potential - Robust momentum in the TASER and Software & Sensors segments, along with investments in AI, drones, and robotics, positions the company favorably for future growth [17].

Among last year's top gainers was Axon Enterprise (AXON 0.95%), which makes tech-based software and hardware for the law enforcement and public safety industries.Axon has been a winning stock for a long time, but 2024 was a breakout year with the stock's 130% gain making it one of the best performers in the S&P 500. Axon is launching new products and services, developing an artificial intelligence (AI) platform, and benefiting from tailwinds in its industry. Can it double again this year?Tailwinds and high ...