Why Axon Enterprise Stock Is Sinking Today

Axon Enterprise (NASDAQ: AXON) stock is getting hit with sell-offs in Thursday's trading. The company's share price was down 5.5% as of 2:10 p.m. ET and had been down as much as 8.9% earlier in the day's trading.

Axon is seeing a valuation pullback on the heels of its recent post-earnings jump. An analyst lowered the stock's price target yesterday, and investors are taking profits after a run of strong gains. Despite today's pullback, the policing technologies specialist's share price is up roughly 97% over the last year.

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Axon stock is giving up some of its post-earnings gains

Argus analyst John Staszak published new coverage on Axon yesterday, maintaining a buy rating on the stock but lowering his one-year price target from $800 per share to $700 per share. As of this writing, the new target still suggests additional upside of approximately 31%.

Axon published its fourth-quarter results this past Tuesday and reported sales and earnings that beat the market's expectations. The business posted non-GAAP (adjusted) earnings per share of $2.08 on sales of $575 million, beating the average analyst estimate's call for adjusted per-share earnings of $1.40 on revenue of roughly $566 million. The stock has been on a big winning streak over the last year, and some investors are moving to take profits following the strong Q4 print.

What's next for Axon?

Axon is guiding for sales between $2.55 billion and $2.65 billion this year, suggesting annual growth of approximately 30% at the midpoint of the guidance range. After posting 33% sales growth last year, it looks like the business is poised to continue seeing strong expansion momentum.

The guidance is even more encouraging given recent concerns related to Axon's dissolution of its partnership with Flock Safety. While some investors and analysts had raised concerns that the end of the partnership would create some significant growth headwinds, this year's growth forecast suggests the impact could be less significant than expected.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Axon Enterprise. The Motley Fool has a disclosure policy.