Why Axon Enterprise Stock Tumbled Again Today
Key Points
Two analysts weighed in with adjustments to their Axon takes.
That didn't help sentiment on the stock, as the pair both reduced their price targets.
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One trading day after getting slammed for its third-quarter results, Axon Enterprise's (NASDAQ: AXON) stock took it on the chin again Thursday. Investors assertively sold out of the security products manufacturer's shares, and as a result their price cratered by over 8%. That fire was fueled by a pair of price target cuts from analysts tracking the stock.
Post-earnings adjustments
Both of those chops were rather dramatic. Morgan Stanley's Meta Marshall reduced her fair value assessment on Axon to $760 per share from the previous $885. Peer analyst Tim Long at Barclays changed his to $702 per share from $861.
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Interestingly, both pundits remain Axon bulls, as they each maintained their equivalent of a buy recommendation on the shares.
It wasn't immediately clear why either pundit made their changes, but they were effected barely one day after Axon published those quarterly figures.
A third quarter to forget
In its third frame Axon posted robust year-over-year revenue improvement of nearly 31%, but investors were concerned with the yawning bottom-line miss. The company's net income not according to generally accepted accounting principles (GAAP) was $1.17 per share, well below the average analyst projection of $1.54.
Some investors were also likely concerned about Axon's announcement that it is acquiring a peer company, privately held Carbyne, for $625 million. They might be concerned that Axon is dipping into its coffers at a time when it should be figuring out ways to bolster its bottom line.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Axon Enterprise. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.
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