Axon Enterprise, Inc. (AXON)
Quantitative Summary
DeterministicAXON trades at 181.7x earnings — a 306% premium to its sector average of 44.7x — without a dominant ROIC-WACC spread. Financial health is average: Piotroski 5/9, Altman Z 5.5. DCF fair value of $6 implies 98% downside based on model assumptions. Beneish M-Score of -2.21 exceeds the -2.22 academic threshold — earnings quality may warrant further review.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe fundamental economics present a stark contradiction between aggressive revenue expansion and deteriorating capital efficiency. While top-line growth of 33.5% suggests strong demand, the return on invested capital (ROIC) of 1.6% falls significantly below the weighted average cost of capital (WACC) at 13.7%, generating a negative spread of -12.1%. This value destruction is evident in the DuPont decomposition: despite healthy gross margins near 60%, low asset turnover and modest leverage drive an ROE of only 3.8%. Although quality metrics like the Altman Z-Score (6.9) and Beneish M-Score (-2.21) indicate low bankruptcy risk and minimal earnings manipulation, a Piotroski F-Score of 5/9 signals moderate financial stability that fails to offset the capital allocation inefficiency.
Valuation multiples reflect extreme market optimism detached from current cash flow generation. The current price-to-earnings ratio of 269.8x vastly exceeds historical norms and sector averages, pricing in a decade-long free cash flow growth rate of 50%. However, discounted cash flow analysis suggests the stock is materially overvalued, with a fair value estimate of $7 implying an upside drag of -98.4% from current levels. This disconnect highlights that the market is betting on sustained hyper-growth to justify the premium, yet factor models reveal significant vulnerabilities; the security exhibits a strong growth tilt (Value Factor: -0.163) while simultaneously displaying weak profitability characteristics relative to its sector peers (Profitability Factor: -0.983).
Risk-adjusted performance data further complicates the investment thesis despite positive alpha signals. The stock has generated an annual Fama-French Alpha of 24.88%, suggesting outperformance after adjusting for market, size, and value factors over recent periods. However, this momentum is counterbalanced by substantial insider activity, with $40.9 million in net selling observed over the last ninety days. The convergence of negative capital spreads, deeply elevated valuations relative to DCF models, and significant insider distribution creates a high-risk environment where future returns hinge entirely on whether revenue growth can eventually translate into improved ROIC before multiple compression occurs.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 33% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 12% | 14% | 16% |
|---|---|---|---|
| 2% | $8 | $6 | $4 |
| 3% | $9 | $6 | $5 |
| 4% | $11 | $7 | $5 |
Center = base case. Green = >10% upside, Red = >10% downside vs $490.12.
Pre-computed DCF: WACC=14.0%, terminal growth 3%. Fair value $6 (-98.2%). Not investment advice.
Valuation Context
Currently trading 58% above its 5-year average P/E of 143.9x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedAxon Enterprise, Inc. is currently trading at $391.88 within the Industrials sector, presenting a snapshot where price action and volume trends offer clues regarding institutional positioning without dictating specific directional moves. The proximity of current levels to key moving average crossovers suggests that larger market participants may be recalibrating their exposure as short-term momentum tests longer-term support structures. When volume surges alongside such technical breaches, it often indicates heightened activity from sophisticated players who are either accumulating positions on perceived dips or distributing shares into strength, depending on whether the price action holds above or breaks below these critical averages. Institutional behavior is frequently mirrored in how sustained trading volumes interact with volatility expansions; if recent sessions show increasing volume without a corresponding proportional rise in price, it could signal growing selling pressure from entities looking to lock in gains after significant appreciation. Conversely, steady volume support during pullbacks might imply that major holders are defending their stakes against market noise. The current setup requires close observation of whether the stock can maintain its footing relative to these dynamic averages, as failure to do so often triggers automated rebalancing by large funds managing risk parameters tied to technical thresholds. Ultimately, the interplay between price levels and trading intensity provides a window into how capital is being allocated or withdrawn in response to shifting market dynamics.
Quant Health Deep Dive
Profitability & Value Creation
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XAR or VOT, the fund manager is mechanically forced to buy or sell AXON shares regardless of Axon Enterprise, Inc.'s individual fundamentals. We estimate $5.7B of passive capital is structurally linked to AXON through 8 tracked ETFs. This substantial passive exposure means that ETF inflows and outflows — not company fundamentals — can dominate daily volume on this stock.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Axon Enterprise, Inc. to visualize passive redemption contagion across ETFs and collateral stocks.
If Axon Enterprise, Inc. (AXON) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies GENERAL ELECTRIC (GE) as the most exposed collateral stock, sharing 2 ETFs with AXON. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 28 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
AXON Ownership Dynamics
Passive funds hold 1 in every 6 AXON shares, reducing daily market volatility.
Axon Enterprise, Inc. (AXON) exerts notable gravity on the passive index market, currently representing 2.4% of the XAR (XAR) and 0.7% of the VOT (VOT). Across 29 tracked ETFs, approximately 14M shares (17.0% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest AXON Exposure
Float lock-up computed from 29 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
AXON Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Axon Enterprise, Inc. over the past year sits near $407.56 (12% of 252-day volume). The current price of $490.12 trades 20.3% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
AXON Capital Efficiency
How efficiently does Axon Enterprise, Inc. convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Axon Enterprise, Inc. converts 38% of its EBITDA into free cash flow, a moderate conversion rate — significant EBITDA is consumed by capital expenditures, working capital changes, or interest payments. The 62% reinvestment rate signals aggressive capacity expansion. However, the ROIC-WACC spread is negative (-12.4%), suggesting reinvested capital is destroying shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-14 | 6,214 | $376.82 | $2.3M |
| 2026-05-13 | 2,418 | $393.66 | $951,869.88 |
| 2026-05-12 | 7,896 | $394.36 | $3.1M |
| 2026-05-08 | 4,555 | $426.89 | $1.9M |
| 2026-05-06 | 8,374 | $380.60 | $3.2M |
| 2026-05-04 | 1 | $402.31 | $402.31 |
| 2026-04-29 | 33 | $406.31 | $13,408.23 |
| 2026-04-23 | 1 | $403.15 | $403.15 |
| 2026-04-20 | 300 | $402.85 | $120,855 |
| 2026-04-16 | 4,647 | $402.18 | $1.9M |
| 2026-04-15 | 3,270 | $380.86 | $1.2M |
| 2026-04-10 | 1,052 | $351.33 | $369,599.16 |
| 2026-04-07 | 748 | $413.07 | $308,976.36 |
| 2026-03-31 | 2 | $415.07 | $830.14 |
| 2026-03-27 | 1,107 | $450.46 | $498,659.22 |
| 2026-03-25 | 17,308 | $456.60 | $7.9M |
| 2026-03-24 | 35 | $507.28 | $17,754.8 |
| 2026-03-23 | 203 | $496.27 | $100,742.81 |
| 2026-03-17 | 251 | $489.64 | $122,899.64 |
| 2026-03-05 | 1 | $569.81 | $569.81 |
| 2026-03-04 | 11,881 | $579.09 | $6.9M |
| 2026-03-03 | 178 | $572.02 | $101,819.56 |
| 2026-02-27 | 185 | $550.19 | $101,785.15 |
| 2026-02-26 | 23,306 | $520.18 | $12.1M |
| 2026-02-25 | 3,955 | $442.51 | $1.8M |
| 2026-02-23 | 230 | $433.91 | $99,799.3 |
| 2026-02-18 | 116 | $431.94 | $50,105.04 |
| 2026-02-11 | 160 | $446.97 | $71,515.2 |
| 2026-02-04 | 113 | $451.29 | $50,995.77 |
| 2026-02-03 | 6 | $459.99 | $2,759.94 |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| PLTR | 0.475 | 0.488 | Moderate |
| BWXT | 0.442 | 0.372 | Moderate |
| DASH | 0.419 | 0.414 | Moderate |
| ZS | 0.405 | 0.440 | Moderate |
| NET | 0.400 | 0.369 | Moderate |
| SNOW | 0.391 | 0.473 | Moderate |
| RKLB | 0.384 | 0.429 | Moderate |
| MSFT | 0.379 | 0.476 | Moderate |
| HOOD | 0.377 | 0.431 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare AXON to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.