Would you Buy This Stock?

Here is a company that has a complete lock on its industry having bought out the only competition that existed, moved into artificial intelligence and cloud initiatives and has the following quarterly revenue growth from oldest to most recent quarters:

**27.73%	  24.59%    16.15%     21.28%     14.42%**

The annual YoY revenue growth has been:

>**35.55%	28.17%   22.18%**

The gross margin has been 59% and P/S is 10.

Would any of you have looked into this stock further?


OK, the company is AAXN…formerly Taser.

Been a triple in just 1 1/2 years.

Point being…looking at those numbers…few here would have gotten past the revenue growth issue.

But the market sometimes behaves in mysterious ways…and we can appear really smart or really dumb with no market logic whatsoever.


I read the first post and composed a reply in my head that was roughly … Would need to look at the qualitative factors, esp moat , and tam, and management … then saw the second post. Long aaxn for those second reasons esp management. Check the CEO compensation incentives they’re wild, also just look through the quarterly and annual reports this is one of the most shareholder friendly companies imaginable they disclose and track every single driver for you right on the sheet. CEO only gets paid if they double in three years or something need to refresh my memory but how often do you see that? Definitely some concerns about tam. They have contacts with 38 of the 68 major metropolitan police forces. Will they get them all and how long will that take? They seem to have stalled a bit in the last year. But the percent of ARR is growing and on the last couple reports they noted a trend toward subscription upsells and more importantly early renewals indicating their existing customers see better value in their subscription offers than their old models which were up front (I’m referring to the weapons not the software). Overall a lot to like about this company, 3% position for me started in January.

The runway looking forward is? Local sheriff departments?

wordlessly watching, he waits by the window and wonders…

The issue to me is not if you are right or wrong but systematically what makes a stock get more valuable.

With Taser (whatever they call themselves these days) I imagine their stock was incredibly beat down, they were living on their legacy business, as dominant as they were in that business, and then they created this new camera and cloud business that took off with little to no competition.

Thereby the market increased the value of the stock back to normal long-term growth valuation with high CAP.

Anything wrong with that explanation?

The problem is finding, systematically, and with a great deal of success, such beaten down rare gems.

One way to find them is to look at relative stock strength. When such a bottom sucker like Taser starts to make it on the IBD relative stock strength chart, then it is time to look. Until then you could wait for a decade or more or forever. Nvidia very similar.

From a systematic perspective is when the relative stock strength hit the 90s and the valuation began to grow again. Worked for Nvidia after a decade of nothing, and worked for Taser.

If one wants to create a systematic manner to approach such investing. But what do I know…



When such a bottom sucker like Taser starts to make it on the IBD relative stock strength chart,

Bottom sucker :(………you should be tased for that comment :).


As you know, I presented AAXN several times at the NPI with little interest generated. But it is NPI…AI for training, moving into ambulances/paramedics, evidence.com, etc.

And of course you are correct that it did fall to a P/S of 4 or so before this recent climb 3 multiple.

It is a “platform” company with no competition…love platform companies.

But by the revenue growth numbers…ugh…stock could care less.

So I present this example as yet another potential angle for your consideration…that often times, our investment thesis isn’t broken…just takes a detour for a while.

So are there parallels in that regard to DOCU…another platform company…it certainly has competition unlike AAXN, but it certainly has more “moat” than just any esignaturing company that some seem to misunderstand?

Not suggesting anyone go out a buy DOCU at this moment…just that keeping a fallen angel watchlist can sometimes produce some serious mojo.


just takes a detour for a while.

Time is money and waiting is a drag on yield.

Denny Schlesinger



My take on AAXN is that it will take a long time to see the fruits of their labor. However, I tend to believe they will get there and be a very strong company and stock at some point. Just not willing to wait.

A couple of concerning things and reasons why growth may take some time. RGB already talked about selling to government agencies…no fun…long sales cycle. There is an upside in that. If they succeed they will likely have long, locked in contracts. But it will take a while. Another one is giving away Evidence for free for the first 5 years. Again, maybe a great idea, but not a revenue driver for some time now. Lastly, and this is from memory (as the rest has been), I don’t recall their recurring revenue portion picking up steam very quickly. The transition seems to be taking a long time as well.

Oh, and lastly, I’ve been concerned about the transition from tasers, a physical product, to technology. They didn’t start out as a technology company. Their leader isn’t a tech guru, and I wonder how proficient they will be and how quickly they will develop the right tech.

So that is my take. I keep AAXN on a watchlist and will review the earnings from a high level. Certainly let us know if you see things changes and I’ll be interested in your thoughts on what I wrote above.

Take care,