Why is Axon Enterprise stock sliding today?
Investing.com ·
Why is Axon Enterprise stock sliding today?
Investing.com -- Axon Enterprise stock slid nearly 9.8% in pre-open trading today after the company reported Q3 2026 results that fell short of Wall Street expectations on both the top and bottom lines, while simultaneously cutting its full-year revenue outlook. Adjusted earnings per share came in at $1.72, missing the analyst consensus of $1.91, while revenue of $908.55 million trailed the $940.02 million estimate — despite representing 28% year-over-year growth.
The guidance reduction proved equally damaging to investor sentiment. Management lowered full-year 2026 revenue guidance to approximately $3.61–$3.63 billion, representing 30% annual growth, down from the prior range of 32–34%, attributing the cut to three Federal Dedrone deployments totaling roughly $130 million that have been pushed out of the fiscal year due to slower government procurement cycles. Free cash flow guidance was also trimmed to $350–$400 million from a prior $450 million target, reflecting accelerated inventory investments to mitigate supply chain risks.
Analyst reactions compounded the selling pressure in pre-market. Needham slashed its price target on Axon to $500 from $750 — while keeping a Buy rating — with analyst Joshua Reilly warning that the company’s 30%-plus normalized five-year bookings target is now at risk. Baird similarly reduced its target to $600 from $675, maintaining an Outperform rating. Zacks Research went further, downgrading the stock from "strong-buy" to "hold." On the corporate action front, Axon’s concurrent announcement of a $1.2 billion investment in drone maker Skydio — raising its ownership to 37% and establishing an exclusive public safety distribution agreement in the U.S. and Canada — was viewed as strategically sound but capital-intensive, adding a near-term overhang.
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