The company known as Taser International is now Axon Enterprise Inc (NASDAQ:TASR), and big changes are in store.
Axon announced Wednesday that it was a making a critical push to usher in the era of the body camera. Namely, TASR will be giving away free body cameras to every police officer in the United States.
It looks like a one-year free trial, and TASR hopes it will accelerate Axon body camera adoption in the U.S. In addition to the name change, which shows that the company is fully embodying the pivot, Axon will trade under the ticker AAXN.
Specifically, Axon is offering:
- One Axon Body 2 camera per sworn officer
- Digital evidence data storage with an Evidence.com “Unlimited Pro” license
- Two mounts per officer
- Docking station to securely upload body camera footage
- Access to the full Axon Academy online training library
It’s the full suite of Axon product offerings, and every police officer is getting it for free for the next year. So far, the market is not liking the news. Investors bought up the stock before the announcement. TASR stock traded as high as $23.20 on Wednesday morning.
The press release, however, was accompanied by a sharp drop in TASR shares. The stock has turned negative on the day and now sits around $21.50 as of this writing.
The sharp reversal in TASR stock makes sense. After all, Axon is a business, not a charity. It can’t just give away a year’s worth of product to every law enforcement agency in the U.S. and not have that affect near-term financial performance. The market, however, seems to be ignoring the boldness of this move and the long-term tailwinds it implies.
A Bold Move By Axon
This is a very bold move indeed by the new Axon. It’s a massive bet that it has the best product in the body camera market. Its also a massive bet that there is a real advantage to being first.
At the end of the day, it’s a huge vote of confidence by management in its Axon suite of products. It also puts a tremendous amount of pressure on competitors. But best of all, it firmly puts Axon in the driver’s seat, and that is a favorable place to be in a growing market.
There are also huge potential long-term tailwinds here. Axon is the company’s growth engine. Axon revenues grew 154% last quarter. Bookings grew 62%. But at the end of the fourth quarter, only 35 of the 68 major city law enforcement agencies had purchased an Axon product.
That means Axon has penetrated about half the domestic market. This one-year free trial will undoubtedly hasten the pace at which the other 33 agencies adopt Axon’s products.
Management has said that there is visibility for Axon to be a $1 billion annual run-rate business. This move accelerates that timeline.
This may be groundbreaking for the body camera industry, but it’s something that has worked in other subscription-based industries.
After all, most successful subscription businesses offer a free trial. Amazon.com, Inc. (NASDAQ:AMZN) offers a free 30-day trial for its Amazon Prime service. Netflix, Inc. (NASDAQ:NFLX) offers a free month trial as well.
I think a free trial offering will work just as well for Axon Enterprise, and believe TASR stock (or AAXN stock soon) is a buy here.
As of this writing, Luke Lango did not hold a position in any of the aforementioned securities.