by winston » Fri Mar 22, 2019 1:39 pm
not vested
March 9, 2019
Axon remains my best growth stock to buy
by Brian Stoffel
Last month, I singled out Axon -- maker of Taser stun guns, Axon body cameras, and the Evidence.com platform -- as my top small cap to buy. Since then, the company reported earnings and the stock fell over 10%.
Based on what was in the earnings report, I'm only more confident about its prospects. Axon is making the conscious decision to forgo short-term profits and instead chase long-term market share via recurring revenue. Wall Street doesn't like that, but long-term shareholders with the stomach for volatility should love it.
During the conference call, founder and CEO Patrick Smith announced the company's body cameras and Evidence.com platform, would be expanding beyond law enforcement into emergency responders and firefighters, greatly expanding the total addressable market.
The company is also giving away its new Taser 7 weapon in a subscription-based bundle, and it will include access to Axon's newest product release -- Axon Records -- for an initial fee of $0.
That helps explain why management believes revenue growth will be tepid. That's what happens when you give products away for free. But do you know what else happens? You lock those customers in for life: The switching costs and network effects mean the competition won't be able to touch Axon.
When the trial periods are over, high-margin revenue should start flowing in, and long-term shareholders will be handsomely rewarded for their patience.
Source: Motley Fool
It's all about "how much you made when you were right" & "how little you lost when you were wrong"