For all the hype and attention that the FANG stocks get, lesser-known Axon Enterprise Inc (NASDAQ:AAXN) is kicking all of their butts in 2018.

At the start of the year, Axon stock was trading under $27. One blowout double-beat-and-raise earnings report later, AAXN stock was in the upper $30s. Then Axon acquired its biggest competitor in early May, and the stock jumped to the mid-$40s. Now, Axon reported yet another, perhaps even more impressive, double-beat-and-raise quarter, and Axon stock is in the mid-$50s.

All together, AAXN stock is up nearly 110% year-to-date. And we aren’t even halfway through the year. By comparison, the top stock in the FANG group, Netflix, Inc. (NASDAQ:NFLX), is up “only” 70%.

Also for reference, in April of last year, Axon stock was barely over $20 after the company formerly known as Taser International switched its name to Axon and decided to give free body cameras to every police officer in the United States.

How exactly has Axon gone from left-for-dead to a best performing stock? And is there more room to rally?

Let’s take a deeper look:

How Axon Stock Went From $20 to $50 in a Year

Just over a year ago, the company formerly known as Taser International switched its name to Axon Enterprise and offered a one-year free trial body camera program to every police officer in the U.S.

Why? Because Axon wanted to show off just how good its body camera system was, and how much it could change the entire law enforcement industry.

It was a bold bet that Wall Street didn’t like at first. After all, when you’re giving away essentially half of your business for free, profitability tends to go out the window. And if the free trials don’t convert into paying customers, then you’re out a whole bunch of money.

But that didn’t happen.

As it turns out, everybody loves Axon’s body cameras and the accompanying cloud solution. Conversion rates from free trial to paying customer have been very, very high, and now, profitability is coming back into the picture. That ramp in profitability is accompanied by still red-hot revenue growth, so the net result is super-charged earnings growth.

When you have super-charged earnings growth, you also tend to get super-charged stock price growth. Indeed, that is what has happened. As profitability has turned a corner over the past two quarters, Axon stock has more than doubled and turned into one of the market’s best performing stocks.

Why Axon Stock Has a Big Growth Runway Ahead

This growth runway has longevity for one simple reason: Axon’s products work.

CEO Rick Smith, in an interview with Mad Money’s Jim Cramer, said that Taser weapon implementation usually results in a 50% reduction in police shootings. More impressively, a Cambridge study found that deploying body cameras on police offers results in a 90%-plus drop in complaints about those police officers.

In other words, Axon’s smart weapons business is necessary because it reduces fatalities and shootings, and Axon’s smart camera business is necessary because it reduces power abuse, increases accountability and enhances evidence management records.

The key word here is “necessary.” It doesn’t really matter if law enforcement agencies want smart weapons and body cameras or not. They need them. And public and media pressure on law enforcement to adopt these necessary technology tools will only increase over time.

Thus, Axon product adoption, from smart weapons to body cameras to cloud solutions, will only accelerate over the next several years. And it will happen on a global scale. Most of the Axon growth narrative right now centers around the United States, United Kingdom and Australia. Soon, continental Europe and other parts of the world will follow suit, and Axon will become a global provider of technology-enhanced law enforcement solutions.

Why Axon Stock May Struggle Here and Now

For all the positives about the Axon growth narrative, AAXN stock seems fully priced here and now after its scorching 100%-rally over the past few months.

Revenue growth this year is projected to be right around 20%, and I think that over the next 10 years, global adoption of Axon products will drive roughly 15% revenue growth per year.

Operating margins were 3.8% last year, but management thinks that Taser segment operating margins can get to 40% in the long-term while Axon segment operating margins can scale towards 25% and up. I largely agree with that, considering the big margins in Axon Cloud, and believe that operating margins in 10 years will shoot towards 30%.

That combination of 15% revenue growth over the next 10 years and 30% operating margins leads me to believe that Axon can record net profits of roughly $5.90 per share in 10 years. A market-average growth multiple of 20-times forward earnings on $5.90 implies a nine-year forward price target of $118. Discounted back by 10% per year, that equates to a present value of roughly $50.

Bottom Line on Axon Stock

Axon is a great company with a strengthening growth narrative and a smart management team. Axon stock simply seems over-priced after its recent 100%-plus rally.

That said, any meaningful pullbacks should be viewed as a buying opportunity.

As of this writing, Luke Lango did not hold a position in any of the aforementioned securities.