Short answer: yes. I think GE Dimitriou SA (AT:TASr)/Axon Enterprise Inc (NASDAQ:AAXN) has excellent long term growth potential. This change speaks of a company that’s aware of current trends and aims to be on the right side of history.
Taser has long been known for their eponymous product: the Taser nonlethal electric weapon used by police. More recently, the company has been expanding into police body cams – a notably different side of law enforcement technology.
Axon is their body cam wing, but the sub-brand has been so successful that it is becoming the company’s new brand identity.
Taser’s recent product offerings, like Axon Sidearm Sidekick, have been focused on police accountability and harm reduction. This is a marked sea change from the days when “taser” was synonymous with police (excessive?) force.
The Sidearm Sidekick is a sensor that’s fitted into police gun holsters. Whenever a gun is drawn, the sensor turns on all police body cameras within 30 feet. The intention is to automatically record each police encounter of any severity, often from multiple angles.
Axon has other sensors that work when police activate sirens, or open the door of their vehicles. It’s an attempt to add redundancy and reliability to the body cam recording process, which is necessary to add clarity to the kind of events which have typified civilian/police conflict in recent years.
Why is AAXN a Good Bet?
I like AAXN for a lot of reasons. Their place in the narrative laid out above places them on the right side of history, socially/politically. But it’s also a deft financial move by Taser. The Body Cams that Axon sells aren’t a one-and-done transaction. Axon also runs the system and software that powers the body cams. When a police force goes with Axon, they’re buying a monthly subscription in addition to the hardware purchase.
What’s more, municipal police forces pretty much have to buy this stuff. Department of Justice investigations into the Baltimore police department make it politically necessary for the city to outfit every officer with body cams. Axon has a corner on the market, and more municipalities are making body cams standard.
Body cams are a young product. The technology will improve, and successive generations of body cams will be replaced by newer, better units. Axon is an established company, with relationships with police forces around the world, meaning that when these systems need updating, Axon will get those sales.
Finally, cameras are a great business to be in right now. It’s conceivable that Axon would develop civilian-focused products. Tasers (the product) are already popular among civvies. Small, automated cameras have many real-world applications, and it’s only a matter of time before Axon figures out how to exploit this.
Should You Buy AAXN?
I see no reason not to. Great company, locked in customers, huge expansion potential. There’s not much left to say. If you’re looking for growth and reliability, AAXN ticks all the boxes in my opinion.
What do you think?
