RBC Capital has reduced its 12-month price target for Axon Enterprise (NASDAQ: AXON) to $735 from $860 while preserving an Outperform rating, a move the firm says reflects a valuation reset in the near term. The new target sits below the consensus high of $950 and follows the company’s latest quarterly results and updated guidance.
The bank pointed to Axon’s fourth-quarter 2025 performance and fiscal 2026 guidance as evidence that the company is expanding into new product categories and industry verticals while retaining its core position in U.S. public safety. In the quarter, Axon reported 43% growth in bookings, a metric RBC said should underpin revenue growth above 30% going forward. The company has already produced 33.5% revenue growth over the past 12 months.
Management provided goals for fiscal 2028 that project adjusted EBITDA margins of roughly 28% despite what RBC described as near-term headwinds. Analysts at the firm view expansion of Axon’s software mix as a key driver of margin improvement across the forecast period. The company reported net revenue retention of 125% and accelerating annual recurring revenue growth, suggesting higher recurring revenue density within sales.
Market data noted by InvestingPro highlights Axon’s strong gross profit margins of 59.7%, but also flags that the stock trades at a high earnings multiple, with a price-to-earnings ratio of 141. The share price has fallen 42% over the past six months, and InvestingPro analysis indicates the stock is currently trading above Fair Value estimates.
RBC also emphasized Axon’s data moats and network effects, saying those characteristics position the business to address potential AI disintermediation risk. The firm described the company as well-positioned to benefit from artificial intelligence trends tied to its product and data footprint.
Axon’s recent quarterly results were broadly ahead of Street expectations. The company reported adjusted earnings per share of $2.15 versus an analyst consensus of $1.60, and quarterly revenue of $797 million, a 39% year-over-year increase that topped the analyst estimate of $755.55 million. Management attributed that growth to stronger adoption of premium software, TASER 10 devices, Axon Body 4 cameras, and counter-drone equipment.
Following the quarter, several brokerages updated their views. Piper Sandler lowered its price target to $690 from $753 but maintained an Overweight rating. Raymond James reaffirmed an Outperform rating with an $800 target, pointing to Axon’s ambitious 2028 targets. Citizens kept a Market Outperform rating and set a $825 price objective, while explicitly noting that AI-related sentiment has affected the stock.
Context and implications
The collection of analyst actions and company metrics portrays a company with robust top-line growth and improving margin potential driven by recurring software revenues, yet facing valuation pressures and short-term headwinds. Broker targets now range below some prior highs even as several firms reiterate positive ratings based on Axon’s product adoption and long-term targets.
Note: This article reports on analyst price target changes, company results and broker commentary as presented in the available disclosures. It does not add or infer facts beyond those published in the referenced statements.