President Donald Trump’s latest financial disclosure, released on Sept. 22, shows more than 1,100 trades made on his behalf in July. Two of the purchases made on July 20 have lost value since then. Carrier Global (NYSE:CARR) is down about 17% from its July 20 closing price, and Axon Enterprise (NASDAQ:AXON) is down almost 20%.
Carrier makes heating and cooling systems. It was part of our coverage on the best stocks to buy under $100 earlier this year.
Axon makes Tasers and body cameras. Let’s focus on AXON in detail and see whether the stock can rebound.
Why Axon Stock Is Down 26% This Year
Axon Enterprise makes TASER stun weapons, body cameras, and drone defense systems, and it sells the software that police departments use to store and manage video evidence. The stock is down 26% this year because investors are worried about margins and cash flow. Q2 gross margin improved only because of tariff refunds, and gross margin in the software and services segment fell. Management said third-quarter adjusted EBITDA margin will take a hit from higher memory costs and will not get the refund benefit.
Pixabay/Public Domain
Bull Case: Faster Growth at a Lower Multiple
Bulls believe the stock has more room to run because Axon now trades far below its own history while its growth keeps accelerating. Revenue rose 35% year over year in the second quarter, and management raised its full-year growth guidance to 32% to 34%. The forward non-GAAP P/E is 55.50, which is 30.47% below the five-year average of 79.82. The trailing non-GAAP P/E of 62.37 is 20.78% below its five-year average of 78.74. Enterprise value to forward EBITDA is 37.60, down 34.48% from the five-year average of 57.38, and enterprise value to trailing sales is 11.08, down 24.43% from 14.66. The forward PEG ratio of 2.05 is 52.09% below its five-year average of 4.29.
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