Why Axon Stock Jumped 130% in 2024

Shares of Axon Enterprise (NASDAQ: AXON) were soaring last year as the law enforcement tech company continued to show brisk growth and introduce new products. The maker of products like Tasers and police body cameras also rose following the election on hopes that Trump administration policies like mass deportation would lead to more spending on its products by law enforcement agencies.

The tech stock finished the year up 130%, according to data from S&P Global Market Intelligence.

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As you can see from the chart below, the stock jumped following three out of its four earnings reports, showing that its results continue to blow past expectations.

^SPX data by YCharts.

Axon continues to impress

Over the years, Axon has consolidated its leadership in law enforcement technology through acquisitions and product innovation, and it has built an unmatched ecosystem of hardware and cloud software to track things like evidence and arrest records that give the company a competitive advantage.

In 2024, its results bore that out. The stock's first major gains came following its fourth-quarter earnings report. With the launch of the Taser 10 and the Axon 4 body camera, revenue jumped 29%, while Axon Cloud helped the company expand its margins.

Axon also touted its acquisition of Fusus, a leader in real-time crime center technology, and drone and robotics company Sky-Hero, which it said would expand its total addressable market from $50 billion to $63 billion.

The next big jump came in August when the company reported sales growth of 35% to $504 million in the second quarter, driven again by Axon Cloud and Services, which jumped 47% to $195 million. Management again raised its full-year revenue guidance, this time to a range of $2 billion to $2.05 billion, and the stock jumped 18% on the news.

Lastly, shares rose 29% on its third-quarter earnings report in November as revenue growth accelerated to 36%, and guidance was again raised, to $2.07 billion. The company continued to see traction with its new generative AI tool, Draft One, which writes drafts of police reports based on body camera footage.

The stock pulled back toward the end of the year, seemingly on valuation concerns amid a broader sell-off in the market.

Image source: Axon.

What to expect for Axon in 2025

Axon's valuation could put pressure on the stock this year because it currently trades at a price-to-earnings ratio of 150 and a price-to-sales ratio of 23, well above its historical average.

This is shaping up to be a promising year for the company given its tech progress in areas like AI, and the Trump administration's prioritization of deportations. But the stock's valuation will make another surge more difficult.

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Jeremy Bowman has positions in Axon Enterprise. The Motley Fool has positions in and recommends Axon Enterprise. The Motley Fool has a disclosure policy.