AXON ENTERPRISE INC (NASDAQ:AXON) – A High-Growth Momentum Stock with Strong Fundamentals and Technical Setup

Investors looking for high-growth momentum stocks with solid technical setups often focus on companies showing faster earnings, strong sales growth, and improving profit margins, qualities that fit strategies like CANSLIM or Minervini’s trend-following method. The ChartMill High Growth Momentum (HGM) Rating combines these key growth measures, while the Technical and Setup Ratings assess the stock’s price movement and consolidation patterns. AXON ENTERPRISE INC (NASDAQ:AXON) stands out as a candidate that fits these conditions, pairing steady earnings momentum with a promising chart setup.

Fundamental Growth Momentum

AXON’s HGM Rating of 6 highlights its steady growth path, backed by these metrics:

• EPS Growth: The company posted a 39.5% year-over-year rise in trailing twelve-month (TTM) earnings per share, with recent quarterly growth rates of 22.6% (last quarter) and 85.7% (previous quarter). This faster profit growth points to better operational performance.
• Revenue Growth: Sales increased 59.8% over the past year, with consistent quarterly growth above 30%. The latest quarter saw a 31% year-over-year rise, showing steady demand for its public safety technology solutions.
• Free Cash Flow Jump: Free cash flow per share climbed 314.6% over the past year, highlighting the company’s ability to turn sales into cash, a key factor for high-growth firms.
• Positive Revisions: Analyst estimates for next-year EPS and revenue have grown by 1.5% and 1.7%, respectively, over the past three months, showing rising expectations.

These fundamentals match the HGM Rating’s focus on faster earnings, wider margins, and higher revisions, all important for momentum investors.

Technical Strength and Setup Quality

AXON’s Technical Rating of 7 and Setup Rating of 7, as seen in the full technical report, emphasize its positive price action:

• Long-Term Uptrend: Despite a recent short-term dip, the stock stays in a long-term upward trend, trading above its 200-day moving average ($621.80). Over the past year, AXON has beaten 95% of all stocks, showing strong performance.
• Consolidation Pattern: The stock has traded between $694.72 and $830.21 over the past month, with the current price near the lower end. This tighter range may set up a breakout chance.
• Support Levels: Several support zones lie below the current price, including a key area between $729.61 and $734.87, which combines moving averages and trendlines. A move above recent highs could signal fresh momentum.

The setup suggests a possible entry at $758.26 (above the 10-day high) with a stop-loss at $729.60, offering a clear risk-reward scenario.

Why This Combination Matters

High-growth momentum strategies work best when strong fundamentals meet technical breakouts. AXON’s steady earnings growth and rising revisions support further price gains, while its consolidation pattern provides a lower-risk entry. This fits the Minervini approach, which focuses on buying top stocks in clear uptrends during periods of tight price action.

For investors searching for similar opportunities, the High Growth Momentum Breakout Setups screen filters for stocks with HGM Ratings above 4, Technical Ratings above 7, and Setup Ratings above 7, helping spot candidates ready for potential breakouts.

Disclaimer: This analysis is not investment advice. Always do your own research and consider risk management before trading.