RBC Starts Axon at Outperform as SaaS Momentum Offsets EPS Miss

Overview

• RBC Capital initiated coverage on November 17 with an Outperform rating and an $860 price target, highlighting sustained growth potential.
• Axon reported roughly $711 million in Q3 revenue, with articles citing conflicting year‑over‑year growth rates ranging from about 6% to 31%.
• Adjusted EPS fell 44.8% to $1.17 and missed estimates, and the stock dropped 9.4% following the November 4 release.
• Recurring metrics remained strong, including ARR at about $1.3 billion and net revenue retention near 124%, with SaaS revenue up 41% to $305 million.
• Management guided Q4 revenue to $750–$755 million and full‑year revenue to around $2.74 billion, while analysts broadly rate the stock a Strong Buy despite recent underperformance and a Barclays target cut to $702.