Axon Enterprise Inc
Axon Enterprise Inc (Nasdaq: AXON) manufacture and sell Conducted Energy Weapons for military forces, law enforcement, private security personnel and for personal defence.
Investment Highlights – WATCH at USD 173.61
Key Risks
Recent News
New Contract: On 9 July 2021, AXON announced that Toronto Police Service has deployed Axon's advanced de-escalation tool, the TASER 7.
Q1 FY21 Financial Highlights (for three months ended 31 March 2021, as of 7 May 2021)
(Source: Company Website)
One Year Share Price Chart
(Data Source: Analysis done by Kalkine Group)
Conclusion
The lossmaking AXON seems overstretched, while the Company is not able to provide net income guidance given the inherent difficulty to ascertain expenses. Moreover, economic conditions are quite uncertain due to the Covid-19 pandemic, which can worsen credit loss. The stock has shown rapid growth in the past year, while the ramped-up capital expenditures can aggravate the net losses, if it fails to generate substantial revenue. The stock made a 52-week high and low of USD 212.37 and USD 78.28, respectively.
Based on the overstretched stock position, worsened losses, uncertain outlook, volatile market conditions, we have given a "WATCH" stance on Axon Enterprise Inc at the closing market price of USD 173.61 (as of 15 July 2021), while we look forward to reviewing H1 FY21 results.
Beam Global
Beam Global (NASDAQ: BEEM) develops patented infrastructure products and is regarded as a CleanTech leader for the electrification of transportation.
Investment Rationale – Speculative Buy at USD 29.47
Risk Assessments
Q1 FY21 Trading Update for the quarter ended 31 March 2021 (as on 24 May 2021)
(Source: Company Website)
One Year Share Price Chart
(Data Source: Analysis done by Kalkine Group)
Valuation Methodology: EV/Sales Approach (NTM) (Illustrative)
Conclusion
BEEM can invent and manufacture renewably energized products to tap the dramatic demand EV charging infrastructure. It is trading close to 52-week low with positive technical stance and can generate substantial value for its shareholders. The Company reported smaller than the expected losses in Q1 FY21 and witnessed a strong level of demand for its products. The encouraging government spending on electric vehicle charting stations can support the growth in the long. Overall, the Group has the ability to benefit from the industry trends, and substantial cash reserves to pursue market opportunities. Stock 52 week High and Low were USD 75.90 and USD 10.53, respectively.
Based on solid operational performance, industry prospects and support from the valuation as done using the above method, we have given a “Speculative Buy” stance on Beam Global at the closing price of USD 29.47 (as on 15 July 2021), with lower double digit upside potential based on 27.50x EV/NTM Sales (approx.) on FY21E Sales (approx.).
*All forecasted figures and Industry Information have been taken from REFINITIV.
*The reference data in this report has been partly sourced from REFINITIV.
*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.
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