Investors with a long-term horizong may find it valuable to assess Axon Enterprise Inc’s (NASDAQ:AAXN) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Axon Enterprise is currently performing. See our latest analysis for Axon Enterprise
How Did AAXN’s Recent Performance Stack Up Against Its Past?
I prefer to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This technique enables me to examine many different companies in a uniform manner using the most relevant data points. For Axon Enterprise, its most recent bottom-line (trailing twelve month) is US$13.55M, which, relative to last year’s figure, has plunged by -26.40%. Since these values are fairly myopic, I’ve estimated an annualized five-year value for AAXN’s earnings, which stands at US$13.11M This suggests that although earnings declined from the previous year, over a longer period of time, Axon Enterprise’s earnings have been rising on average.
What’s the driver of this growth? Let’s see if it is solely attributable to an industry uplift, or if Axon Enterprise has experienced some company-specific growth. The hike in earnings seems to be propelled by a strong top-line increase overtaking its growth rate of costs. Though this resulted in a margin contraction, it has made Axon Enterprise more profitable. Viewing growth from a sector-level, the US aerospace & defense industry has been growing, albeit, at a subdued single-digit rate of 5.48% over the past twelve months, and 4.25% over the past half a decade. This means that any tailwind the industry is deriving benefit from, Axon Enterprise has not been able to gain as much as its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors impacting its business. I suggest you continue to research Axon Enterprise to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for AAXN’s future growth? Take a look at our free research report of analyst consensus for AAXN’s outlook.
- Financial Health: Is AAXN’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.