Axon Enterprise

Methodology

Axon's combination of Taser devices and cloud-based evidence management software creates a unique hybrid of hardware sales and recurring SaaS revenue. The company's transition toward subscription software for law enforcement is improving earnings predictability and quality. This calculation works increasingly well as Axon's software and services grow, though the transition mix between hardware and recurring revenue creates some near-term complexity.

Methodology

Axon often trades at elevated PEG ratios reflecting perceptions of the public safety software market opportunity versus current penetration. The company's network effects from agencies adopting Evidence.com and expansion into adjacent markets like records management justify growth stock valuations. Compare to other vertical SaaS providers and mission-critical software to assess whether Axon's market position and expansion runway warrant its premium.

Methodology

Axon does not pay dividends, reinvesting all capital into product development, international expansion, and building out the public safety cloud ecosystem. PEGY essentially equals PEG, offering no additional insight. Investors focus on Axon's ability to convert its installed base into recurring software revenue and expand into adjacent public safety workflows rather than seeking any capital returns.