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Smart investors like stock splits not only because they reduce a company's share price but also because they tend to spotlight stocks worth owning. I say that because stock splits are necessary only after substantial and lasting share price appreciation, which rarely happens to mediocre companies.
Shares of Axon Enterprise (NASDAQ: AXON) have surged 1,780% in the last two decades, which equates to 15.8% annually. That makes the company a stock split candidate in 2025.
More importantly, Wall Street is overwhelmingly bullish. Among the 15 analysts who follow Axon, 100% have a buy rating on the stock. No other company in the S&P 500 has a higher percentage of buy ratings, according to FactSet Research.
Here's what investors should know about Axon.
Axon is a public safety company with a strong position in several markets
Axon specializes in public safety. The company was originally called Taser International, a nod to its invention of the conducted energy devices sold under the brand name Taser. Axon still dominates that market, but it has more recently expanded into sensors and software, as detailed below:
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Sensors: Body cameras, in-car cameras, and drone-mounted cameras capture audio and video footage; those sensors can also send footage and location data to dispatchers and commanding officers. Axon's sensor ecosystem integrates with its software products.
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Software: Axon Evidence is a digital evidence management system that stores sensor data. Axon Records is a records management system that simplifies reporting using digital evidence from sensors. And Axon Respond is a situational awareness platform that provides real-time insight into situations as they evolve in the field.
Axon has several competitors in the sensors and software space, including Motorola and Oracle, but the company has a distinct competitive advantage in that most U.S. state and local law enforcement use Axon Tasers. Those pre-existing customer relationships have helped the company secure a leadership position in body-worn cameras and digital evidence management software.
Even so, Axon has hardly scratched the surface of its long-term opportunity. Total revenue increased 32% to $1.9 billion in the last four quarters, but that figure represents less than 3% of what management sees as a $77 billion addressable market. In particular, Axon has room to grow within the U.S. federal law enforcement and commercial enterprise verticals and law enforcement in international markets.
Axon is using artificial intelligence to simplify law enforcement workflows
Axon has incorporated artificial intelligence (AI) into several products. Its digital evidence management software leans on AI to automate the transcription and redaction of audio and video files. The Axon Fleet cameras utilize AI to read license plates across three lanes of traffic and alert the officer within a second when they find a match on an agency hotlist.