AXON - Axon Enterprise: Building An Impenetrable Fortress

• Axon Enterprise is an American business which develops hardware and software products for military, law enforcement, and civilians.
• Axon benefits from high switching costs, a strong brand, and possesses a cornered resource in Co-Founder and CEO, Rick Smith.
• Axon has grown revenues at a 26% CAGR from 2017-2021, led by growth in high-margin subscription revenue, which has been accretive to adjusted EBITDA margins.
• Axon has a strong net cash position of $424 million and has reported positive free cash flow in five of their last six quarters.
• Axon has seen its valuation multiple contract sharply in the past 12 months to a forward EV/sales multiple of 5.3x, despite upgrading both revenue and adjusted EBITDA guidance for 2022.

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