This stock of growth is just beginning

Lthe aw app may not seem like the most logical growth business in the world, though Axon Enterprise (NASDAQ: AXON) has managed to become a high-growth stock that serves exactly this market. The company’s tasers are growing in popularity, but body cameras and other services are finally driving the company.

Over the past five years, Axon’s share price has risen sharply by 554% and revenue has risen 233%. But it is possible that this company will begin its growth trajectory. And even near historic highs, there are plenty of reasons to like Axon’s actions.

Image source: Axon.

The history of growth has not lost strength

For more than a decade, Axon has been a growing stock. The company started with Tasers and gradually added body cameras and video storage to the cloud, but is now a full-fledged police data company.

AXON (TTM) Revenue Chart

YCharts AXON (TTM) revenue data.

In a recent presentation to investors, management said Taser sales have grown at a compounded rate of 16% over the past five years, while body cameras and other sensors have grown at a rate of 40% and cloud services have grown by 57%. What’s crazy is that the growth of the company may just begin.

The new products widen the Axon moat

As valuable as Tasers and body cameras for Axon, they are the tip of the iceberg. Management believes there is a total targeting market of $ 27 billion and Tasers ($ 5 billion) and body cameras and digital evidence management ($ 11 billion) are less than 60% of this opportunity.

Axon Records is a dynamic records service that includes video scanning, transcripts, and identification in an effort to digitize and automate law enforcement records. Management places its opportunity at $ 2 billion.

Dispatch offers another $ 2 billion opportunity to integrate the shipping process into Axon services. Virtual reality and augmented reality are another potential $ 2 billion market for Axon.

What each of these products have in common is that they bind to Axon’s basic systems for capturing and managing evidence. As the company adds more products that integrate seamlessly, it will be able to add more value and generate more revenue from each customer, increasing its competitive gap.

Axon’s business has room to grow

There is no doubt that Axon shares are expensive, almost 15 times the sales, and that the company has no profit to prove throughout its growth. But Axon could grow for a decade or more and profitability should increase rapidly when the company decides to curb investment in sales and research and development. And when that bottom line growth comes along, stocks might look cheap again.

As a clear leader in the law enforcement industry, Axon is an excellent long-term stock and I believe it will continue to outperform the market in the long run. It is a growth stock that is still in the early stages of its growth history.

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Travis Hoium owns shares in Axon Enterprise. The Motley Fool owns shares of Axon Enterprise and recommends. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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