Enterprise

If You Had Bought Axon Enterprise (NASDAQ:AAXN) Stock Three Years Ago, You Could Pocket A 190% Gain Today – Simply Wall St News


The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But in contrast you can make much more than 100% if the company does well. To wit, the Axon Enterprise, Inc. (NASDAQ:AAXN) share price has flown 190% in the last three years. Most would be happy with that. On top of that, the share price is up 40% in about a quarter.

Check out our latest analysis for Axon Enterprise

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company’s share price and its earnings per share (EPS).

Over the last three years, Axon Enterprise failed to grow earnings per share, which fell 4.9% (annualized).

Given the share price resilience, we don’t think the (declining) EPS numbers are a good measure of how the business is moving forward, right now. So other metrics may hold the key to understanding what is influencing investors.

It could be that the revenue growth of 20% per year is viewed as evidence that Axon Enterprise is growing. If the company is being managed for the long term good, today’s shareholders might be right to hold on.

The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

NasdaqGS:AAXN Income Statement, January 16th 2020
NasdaqGS:AAXN Income Statement, January 16th 2020

Axon Enterprise is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

It’s good to see that Axon Enterprise has rewarded shareholders with a total shareholder return of 46% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 22% per year), it would seem that the stock’s performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we’ve spotted 3 warning signs for Axon Enterprise you should know about.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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