What Happened?
Shares of self defense company AXON (NASDAQ:AXON) jumped 2.7% in the afternoon session after the company secured two multi-million dollar contracts with police departments for its AI-powered technology, including body cameras and drones.
The City of Rialto approved a nine-year, $14.3 million deal for Axon's surveillance and software offerings. Similarly, Kennewick, Washington, greenlit a $10.6 million, 10-year investment in the company's police tech. These deals signaled growing demand for Axon's products. The positive news appeared to outweigh other company developments. Axon also entered into agreements to exchange about $177.9 million of its convertible senior notes for cash and common stock. Additionally, regulatory filings disclosed that the company's President and CEO sold a combined total of over $16.5 million in stock.
After the initial pop the shares cooled down to $562.64, up 2.9% from previous close.
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What Is The Market Telling Us
Axon’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 1 month ago when the stock dropped 18.5% on the news that the company reported third-quarter results that missed profit expectations and provided weak EBITDA guidance for the upcoming quarter.
While revenue for the quarter grew 30.6% year-on-year to $710.6 million, beating Wall Street's estimates, investors focused on the negatives. The company's adjusted earnings per share of $1.17 came in 24.1% below the consensus estimate of $1.54. Furthermore, Axon's EBITDA guidance for the fourth quarter was below analyst expectations. The company also saw its operating margin contract, falling to -0.3% from 4.4% in the same quarter last year, indicating rising expenses were outpacing revenue growth. Despite the earnings miss, the company's revenue guidance for the next quarter was slightly ahead of forecasts.
Axon is down 5.7% since the beginning of the year, and at $562.64 per share, it is trading 35.4% below its 52-week high of $870.97 from August 2025. Investors who bought $1,000 worth of Axon’s shares 5 years ago would now be looking at an investment worth $4,484.
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