Why I Love Axon

Summary

• Axon can ship product for most of this year without supply-chain disruption.
• The company serves law enforcement agencies that will continue to operate regardless of pandemic or recession.
• Axon has future contracts with total revenue of $1.3 billion.

Axon Enterprise Inc. (AAXN) is one of the few companies that I have confidence in during these trying times. Axon is not a "just in time" manufacturer and was already diversifying away from China prior to the Covid-19 pandemic due to the Trump-China trade war. Company management made this clear in the latest earnings call at the end of February:

I want to take a moment and talk about the coronavirus. Our operations team has been effective managing through this situation thus far. And at this time, given the current impacts, we feel that we can manage toward our full year guidance and that we have some flexibility to be adaptable.

However, like every company dealing with this, we are closely monitoring this and in constant communication with our supply chain and this may impact year-end if the situation further develops. But currently, we feel good about our guidance.

In addition, Axon's primary customers, which are law enforcement agencies, will still be operational throughout the pandemic. While there may be some adjustments to government budgets as the year progresses and the pandemic impact becomes clear, I view body cameras and CEW devices as essential for officers to do their jobs. So I don't expect that there will be too much impact on Axon's revenue. There may be an impact on revenue growth for this year, but probably not as much as for other publicly investable companies.

Axon has a vision for the future that leaves me pretty excited. This not only includes the latest generation of TASER devices, but AI-enabled body cameras that clip on to sunglasses, near-real-time video capture via connected video sources, including drones which can be dispatched to the scene.

(Source: Axon Enterprise)

While the law enforcement technologies are advancing rapidly, Axon is also building a stream

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.