Axon Enterprise Inc (NASDAQ:AXON) Fits the CAN SLIM Investment Strategy with Strong Growth and Market Leadership

The CAN SLIM investment strategy, created by William O’Neil, is a method focused on growth that blends fundamental and technical analysis to spot stocks with high potential. The acronym represents Current earnings, Annual earnings growth, New products or services, Supply and demand, Leader or laggard, Institutional sponsorship, and Market direction. Stocks fitting these conditions are often market leaders with solid earnings momentum, institutional support, and positive technical patterns.

Axon Enterprise Inc (NASDAQ:AXON) appears as a stock that matches several important CAN SLIM rules. Next, we review how the company fits these standards using the available data.

Current Earnings Growth (C)

The CAN SLIM method looks for strong quarterly earnings growth, preferably over 20-25%. Axon showed a 22.6% year-over-year EPS increase in its latest quarter, hitting this mark. Revenue also rose by 31%, highlighting the company’s progress. This growth in sales and earnings signals Axon’s rising market presence, a key factor for CAN SLIM investors.

Annual Earnings Growth (A)

O’Neil’s approach prefers firms with steady yearly earnings growth. Axon’s three-year EPS growth of 36.3% reflects lasting profitability, well beyond the 25% minimum suggested by CAN SLIM. The company’s Return on Equity (ROE) of 18.19% also shows effective use of capital, beating 88% of competitors in the Aerospace & Defense sector.

New Products or Market Leadership (N)

Axon works in public safety technology, offering body cameras, cloud-based evidence systems, and TASER devices. Its emphasis on innovation and updating law enforcement tools fits the "New" rule, whether through product advances or industry changes. The stock’s 94.92 relative strength (CRS) further proves its leading position, surpassing 94% of all market stocks.

Supply and Demand (S)

CAN SLIM seeks stocks with limited shares and strong institutional interest. Axon has a debt-to-equity ratio of 0.68, showing reasonable borrowing, while institutional ownership is at 82%—within the preferred range (under 85%) where institutions are still building positions rather than overinvested.

Market Direction (M)

The broader market (S&P 500) stays in a positive long-term trend, aligning with the CAN SLIM strategy of buying stocks in favorable conditions. Although Axon’s short-term trend has softened slightly, its long-term upward movement holds, indicating room for recovery.

Technical and Fundamental Summary

• Fundamental Analysis: Axon earns 5/10 in ChartMill’s fundamental rating, with strong growth balancing its high valuation. Its profitability and financial stability are sound, but its P/E ratio (115.51) shows investor confidence in future earnings. (Full FA Report)
• Technical Analysis: The stock has a 7/10 technical rating, backed by a solid long-term uptrend despite recent sideways movement. Key support near $705 may offer a buying chance if the stock steadies. (Full TA Report)

Conclusion

Axon Enterprise displays multiple CAN SLIM traits, including strong earnings growth, sector leadership, and institutional backing. While its valuation stays high, the company’s advances in public safety tech and steady revenue growth make it an interesting pick for growth-focused investors.

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Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Always conduct your own research before making investment decisions.