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What if I told you about a stock that’s surged 120X over the past 15 years… Crushed the performance of Apple (AAPL), Amazon (AMZN), Google (GOOG), and Netflix (NFLX)…
Is growing sales 30% per year…
And yet most investors have no idea it exists. Is that a stock you’d like to buy?
Now and again, I stumble upon a great business and think, “Man, I wish I owned this stock.”
Axon Enterprise (AXON) is one of those. Its chart is a thing of beauty:
How did a stun gun startup crush big tech?
Axon invented the TASER, a handheld device that zaps someone with electricity to stop them without killing them.
TASER quickly became a game-changer for police departments across America. Axon took the cash from that business and used it to build a product lineup that’s like a superhero utility belt for cops.
Imagine a tiny camera clipped to a cop’s chest, recording everything they see. That’s the Axon body camera. They record every second of an officer’s shift. No more “he said, she said.” If you’ve ever seen a viral police video on YouTube, odds are it was captured on an Axon body cam.
All those videos are stored in Axon’s cloud platform. Cops upload footage, and it’s organized, searchable, and secure. It’s like Google Drive for police evidence, with extras like artificial intelligence to transcribe audio or redact faces.
Cop cloud? Sounds kind of boring, but it’s Axon’s cash cow. An $800 million business with 80% margins, whoa!
Axon has a classic razor-and-blades model. It sells hardware like stun guns and body cams, then keeps customers spending by charging them monthly fees to access Axon’s growing software suite.
These tools are bundled into long-term contracts called Officer Safety Plans. It’s how Axon locks in customers for years at a time. This creates sticky, recurring revenue. And since Axon mainly deals with governments, its business is recession-proof.
This business model allowed Axon to grow revenues from less than $50 million in 2005 to over $2 billion last year. That incredible growth has turned Axon into one of America’s top-performing stocks over the past 15 years.
So, are Axon’s best days behind it? The stock likely won’t 120X again. But my research shows its greatest opportunity lies ahead.
A flying robot delivered my lunch a few weeks ago…
You can get burritos, sushi, and coffee delivered by drone here in Dublin.
I got a burrito. Well, I got two burritos because the first one was delivered so fast that I missed my chance to record it.
Mark my words. Drones are going to transform our world. Our kids will wonder, “Grandpa, you mean to tell me humans driving 3,000 lb. cars used to deliver lunch?”
Sure, they’ll deliver your burrito in five minutes flat. They’ll also reimagine public safety. That’s where Axon comes in.
Last year, Axon bought Dedrone—America’s #1 drone public safety company.
Dedrone’s systems already cover half of the US population across 40 cities. Its security umbrella extends to 30 airports, 50 stadiums, and 50 correctional facilities.
The future of public safety isn’t more boots on the ground. It’s eyes in the sky.
Imagine every Taylor Swift concert, NFL game, airport terminal, or political rally protected by autonomous drones.
This fixes safety. No hour-long security lines, metal detectors, and creepy pat-downs. Just drones monitoring from above, focusing on actual threats.
This is clearly “where the puck is going” in public safety. Within the next five years, every major public event from New Year’s Eve in Times Square to the Super Bowl will be protected by drones.
When you call 911 in Las Vegas today…
A drone often arrives before a cop.
This “drones as first responders” model will sweep across America within a few years.
Instead of sending a cruiser to a 911 call, departments can launch drones. They can chase suspects. Patrol crime hotspots. Or monitor a burglary in progress from above. And they do it faster, cheaper, and safer than any officer ever could.
Drones also shine in emergencies. They’ll deliver defibrillators to heart attack victims. Drop flotation devices for drowning swimmers. And find lost hikers before hypothermia sets in.
So, should you buy Axon stock?
Axon is one of the biggest disruptors in public safety today. It’s certainly the best way to profit from the rise of drones in America.
But the stock isn’t cheap. It’s trading at around 120X forward earnings. It’s the highest valuation in three years.
For now, I’m adding it to the watchlist. It’s a name I’d love to buy on dips.
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