AXON Stock Falls -35% On Soaring Valuation Fears Before Earnings
Axon Enterprise (AXON) – a provider of TASER devices and law enforcement digital evidence solutions – hit a 7-day losing streak, with cumulative losses over this period amounting to -35%. The company’s market cap has crashed by about $17 Bil over the last 7 days and currently stands at $31 Bil.
The stock has YTD (year-to-date) return of 29.6% compared to -0.7% for S&P 500. This calls for a re-evaluation of the stock’s valuation to find out whether this is an opportunity or a trap.
What Triggered The Slide?
[1] Pre-Earnings Valuation Concerns
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- Impact: Sharp Price Decline, Heavy Institutional Selling
[2] Anticipation of Weaker Earnings
- Prior Quarter Earnings Miss Due To Weak Margins
- Plunge on High Trading Volume Jan 28-29
- Impact: Increased Investor Anxiety, Profit-Taking Ahead of Results
Opportunity or Trap?
Below is our take on valuation.
There is not much to fear in AXON stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive (For details, see Buy or Sell AXON).
But here is the real interesting point.
You are reading about this -35% move after it happened. The market has already priced in the news. To avoid the next loser before the headlines, you need predictive signals, not notifications. Our High Quality Portfolio has a risk model designed to reduce exposure to losers.
Returns vs S&P 500
The following table summarizes the return for AXON stock vs. the S&P 500 index over different periods, including the current streak:
| Return Period | AXON | S&P 500 |
|---|---|---|
| 1D | -7.2% | -1.2% |
| 7D (Current Streak) | -34.5% | -2.6% |
| 1M (21D) | -36.2% | -2.1% |
| 3M (63D) | -43.4% | 0.4% |
| YTD 2026 | -29.6% | -0.7% |
| 2025 | -4.4% | 16.4% |
| 2024 | 130.1% | 23.3% |
| 2023 | 55.7% | 24.2% |
Take a look at what history tells you about whether past dips like this have been buying opportunities or traps: AXON Dip Buyer Analysis.
Gains and Losses Streaks: S&P 500 Constituents
There are currently 85 S&P constituents with 3 days or more of consecutive gains and 50 constituents with 3 days or more of consecutive losses.
| Consecutive Days | # of Gainers | # of Losers |
|---|---|---|
| 3D | 36 | 25 |
| 4D | 16 | 7 |
| 5D | 8 | 4 |
| 6D | 13 | 3 |
| 7D or more | 12 | 11 |
| Total >=3 D | 85 | 50 |
Key Financials for Axon Enterprise (AXON)
Last 2 Fiscal Years:
| Metric | FY2023 | FY2024 |
|---|---|---|
| Revenues | $1.6 Bil | $2.1 Bil |
| Operating Income | $156.8 Mil | $58.5 Mil |
| Net Income | $175.8 Mil | $377.0 Mil |
Last 2 Fiscal Quarters:
| Metric | 2025 FQ2 | 2025 FQ3 |
|---|---|---|
| Revenues | $668.5 Mil | $710.6 Mil |
| Operating Income | $-1.0 Mil | $-2.1 Mil |
| Net Income | $36.1 Mil | $-2.2 Mil |
The losing streak AXON stock is currently on doesn’t inspire much confidence among investors. In contrast, Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 — the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.