Axon Enterprise, Inc.

(NASDAQ Global Select)
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Somewhat Bullish +45

Axon vs. Teledyne: Which Defense & Security Stock has Greater Upside?

AI-generated analysis

📈 Axon Enterprise’s Connected Devices segment grew 29.1% year-over-year in 2025, driven by VR training, TASER 10, and counter-drone equipment.

📷 The launch of the Axon Body 4 body-worn camera boosted demand through enhanced bi-directional communications and POV features.

⚡ TASER revenues increased 21.8% in 2025 led by the TASER 10 model, while Personal Sensors revenue rose 25.3%.

🚀 Platform Solutions revenues surged 72.5% in 2025 due to counter-drone, virtual reality, and fleet solutions adoption.

💻 Software & Services segment grew 39.6% in 2025, fueled by digital evidence management and premium subscription plans.

🤖 Axon is strengthening its position in counter-drone defense with AI-powered command-and-control platforms via Dedrone offerings.

⚠️ Axon faced rising costs and expenses in Q1 2025, including 48% higher SG&A expenses due to integration activities and higher compensation.

🛡 Teledyne benefits from strong European defense demand driven by regional spending increases and favorable U.S. defense policies.

✈ Commercial air travel recovery supports Teledyne’s growth, with IATA predicting a 4.9% rise in passenger kilometers for 2026.

🔧 Teledyne’s Aerospace and Defense Electronics segment rose 40.4% year-over-year in Q4 2025 due to acquisitions and organic growth.

🤝 Teledyne acquired DD-Scientific Holdings in January 2026 to expand sensing and electronics capabilities.

⚓ Teledyne also acquired TransponderTech from Saab AB in October 2025 to add connected maritime products to its portfolio.

⚠️ Supply chain challenges for Teledyne include increased lead times, parts cost inflation, and potential sluggish aircraft deliveries impacting cash flow.

📉 Axon shares lost 28.8% over the past six months compared to a 10.2% gain for Teledyne during the same period.

📊 Analyst estimates project Axon’s 2026 sales growth of 28.3% and EPS growth of 18.5%.

📈 Teledyne is forecast to grow 2026 sales by 4.1% with an estimated 8.5% EPS increase for the same period.

💰 Teledyne trades at a forward 12-month P/E ratio of 25.68X, presenting a potentially more attractive valuation than Axon.

Bullish Signals
  • Segmental revenues for Axon increased 29.1% year over year in 2025, driven by strong demand for virtual reality training, TASER 10 handles, and counter-drone equipment.
  • The introduction of the next-generation Axon Body 4 camera in 2023 is generating significant demand, boosting growth in both Connected Devices and Personal Sensors segments.
  • TASER product line revenues increased 21.8% year over year in 2025, while Personal Sensors surged 25.3%, primarily led by the Axon Body 4 camera.
  • Platform Solutions product line revenues soared 72.5% in 2025, supported by counter-drone, virtual reality, and fleet offerings.
  • The Software & Services segment showed continued momentum with revenues increasing 39.6% in 2025 following a 33.4% jump in 2024.
  • Adoption of premium subscription plans continues to rise as more customers recognize the value of enhanced capabilities.
  • Teledyne is experiencing strong demand from the defense sector, particularly in Europe, driven by rising regional defense spending and favorable macroeconomic conditions.
  • Commercial air travel rebound is serving as a key growth driver for Teledyne, with IATA expecting demand for air travel to rise 4.9% in 2026.
  • Teledyne's Aerospace and Defense Electronics segment sales rose 40.4% year over year in the fourth quarter of 2025, fueled by acquisitions and organic growth.
  • Axon recently acquired DD-Scientific Holdings Limited in January 2026 to expand its differentiated sensing and electronics portfolio.
  • Teledyne acquired TransponderTech business from Saab AB in October 2025 to add connected commercial maritime products to its portfolio.
  • The Zacks Consensus Estimate for AXON implies year-over-year EPS growth of 18.5% in 2026, with EPS estimates increasing over the past 60 days.
  • Teledyne's EPS estimates have been trending northward for both 2026 and 2027 over the past 60 days.
  • Teledyne is trading at a forward 12-month price-to-earnings ratio of 25.68X, presenting an attractive valuation compared to Axon.
Risk Factors
  • Escalating costs and expenses pose a significant threat to Axon's margins and profitability, with SG&A expenses surging 48% and total operating expenses climbing 54.7% year over year in Q1 2025.
  • High operational burdens from business integration activities, increased headcount, higher wages, and stock-based compensation are driving up costs rapidly.
  • The Zacks Consensus Estimate for Axon's 2026 EPS growth of 18.5% is significantly trailing Teledyne's projected 8.5% EPS growth in the same period, indicating weaker future earnings expectations.
  • Axon shares have lost 28.8% over the past six months, while Teledyne has gained 10.2%, reflecting negative market sentiment and significant downside pressure on Axon stock.
  • Teledyne faces supply-chain challenges including increased lead times and cost inflation for parts, which may lead to slower aircraft deliveries and result in slow cash flow for component manufacturers like itself.
Full Analysis
Axon Enterprise and Teledyne Technologies are two prominent competitors in the aerospace and defense sector, specializing in public security and digital imaging solutions. Axon has experienced significant growth driven by its Connected Devices segment, which saw revenues increase 29.1% year over year in 2025. This expansion is fueled by strong demand for products such as the Axon Body 4 body-worn camera, the TASER 10 handle, and counter-drone equipment, with revenues from TASER growing 21.8% and Personal Sensors surging 25.3% in 2025. Additionally, its Software & Services segment recorded a 39.6% revenue increase in 2025, supported by digital evidence management and AI-powered command-and-control platforms like Dedrone. Despite this revenue growth, Axon faces margin pressures due to escalating costs. In the first quarter of 2025, its cost of sales rose 18.2% while SG&A expenses jumped 48%, pushing total operating expenses to $374.5 million, largely due to business integration activities and higher wages. Teledyne, conversely, is benefiting from rising defense spending in Europe and a recovering commercial aviation market, with sales from its Aerospace and Defense Electronics segment up 40.4% year over year in the fourth quarter of 2025. The company has also bolstered its portfolio through acquisitions, including DD-Scientific Holdings in January 2026 and TransponderTech from Saab AB in October 2025, though it contends with supply-chain challenges such as increased lead times and component cost inflation. Recent market performance shows divergence between the two stocks, with Axon shares declining 28.8% over the past six months while Teledyne stock gained 10.2%. Analyst forecasts indicate stronger projected growth for Axon, with Zacks Consensus Estimates predicting a 28.3% increase in 2026 sales and 18.5% growth in earnings per share compared to Teledyne’s expected 4.1% sales growth and 8.5% EPS increase for the same period. Valuation-wise, Teledyne trades at a forward 12-month price-to-earnings ratio of 25.68X, while Axon is currently trading at a lower multiple than implied by its projected earnings acceleration.