Stock Analysis on Net

Axon Enterprise Inc. (NASDAQ:AXON)

This company has been moved to the archive! The financial data has not been updated since May 9, 2023.

Economic Value Added (EVA)

Microsoft Excel

Economic Profit

Axon Enterprise Inc., economic profit calculation

US$ in thousands

Microsoft Excel
12 months ended: Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Net operating profit after taxes (NOPAT)1 326,174 38,523 51,762 17,857 78,057
Cost of capital2 11.50% 12.00% 12.01% 12.01% 11.98%
Invested capital3 1,607,800 1,262,920 722,746 500,291 631,660
 
Economic profit4 141,242 (113,035) (35,018) (42,215) 2,374

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2022 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 326,17411.50% × 1,607,800 = 141,242

Item Description The company
Economic profit Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital. Axon Enterprise Inc. economic profit decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.

Net Operating Profit after Taxes (NOPAT)

Axon Enterprise Inc., NOPAT calculation

US$ in thousands

Microsoft Excel
12 months ended: Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Net income (loss) 147,139 (60,018) (1,724) 882 29,205
Deferred income tax expense (benefit)1 22,090 (80,345) (16,417) (7,989) (8,749)
Increase (decrease) in allowance2 (27) 98 538 (315) 1,128
Increase (decrease) in deferred revenue3 156,728 176,131 69,381 24,367 56,151
Increase (decrease) in accrued warranty expense4 (2,011) 2,053 (707) 578 254
Increase (decrease) in equity equivalents5 176,780 97,937 52,795 16,641 48,784
Interest expense 488 28 55 46 86
Interest expense, operating lease liability6 2,366 737 819 377
Adjusted interest expense 2,854 765 874 423 86
Tax benefit of interest expense7 (599) (161) (184) (89) (18)
Adjusted interest expense, after taxes8 2,255 604 691 334 68
Net operating profit after taxes (NOPAT) 326,174 38,523 51,762 17,857 78,057

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in allowance.

3 Addition of increase (decrease) in deferred revenue.

4 Addition of increase (decrease) in accrued warranty expense.

5 Addition of increase (decrease) in equity equivalents to net income (loss).

6 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 43,500 × 5.44% = 2,366

7 2022 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 2,854 × 21.00% = 599

8 Addition of after taxes interest expense to net income (loss).

Item Description The company
NOPAT Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income. Axon Enterprise Inc. NOPAT decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.

Cash Operating Taxes

Axon Enterprise Inc., cash operating taxes calculation

US$ in thousands

Microsoft Excel
12 months ended: Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Provision for income taxes (income tax benefit) 49,379 (81,357) (4,567) 1,188 (1,101)
Less: Deferred income tax expense (benefit) 22,090 (80,345) (16,417) (7,989) (8,749)
Add: Tax savings from interest expense 599 161 184 89 18
Cash operating taxes 27,888 (851) 12,034 9,266 7,666

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Item Description The company
Cash operating taxes Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction. Axon Enterprise Inc. cash operating taxes decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.

Invested Capital

Axon Enterprise Inc., invested capital calculation (financing approach)

US$ in thousands

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Convertible notes, net 673,967
Operating lease liability1 43,500 26,979 24,383 10,609 12,777
Total reported debt & leases 717,467 26,979 24,383 10,609 12,777
Stockholders’ equity 1,268,491 1,047,849 976,255 543,495 467,324
Net deferred tax (assets) liabilities2 (156,865) (126,382) (45,121) (27,334) (19,347)
Allowance3 2,176 2,203 2,105 1,567 1,882
Deferred revenue4 608,040 451,312 275,181 205,800 181,433
Accrued warranty expense5 811 2,822 769 1,476 898
Equity equivalents6 454,162 329,955 232,934 181,509 164,866
Accumulated other comprehensive (income) loss, net of tax7 7,179 1,317 (141) 1,096 1,513
Adjusted stockholders’ equity 1,729,832 1,379,121 1,209,048 726,100 633,703
Construction-in-process8 (62,283) (25,258) (13,479) (12,385) (14,820)
Investments9 (777,216) (117,922) (497,206) (224,033)
Invested capital 1,607,800 1,262,920 722,746 500,291 631,660

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

1 Addition of capitalized operating leases.

2 Elimination of deferred taxes from assets and liabilities. See details »

3 Addition of allowance for doubtful accounts receivable.

4 Addition of deferred revenue.

5 Addition of accrued warranty expense.

6 Addition of equity equivalents to stockholders’ equity.

7 Removal of accumulated other comprehensive income.

8 Subtraction of construction-in-process.

9 Subtraction of investments.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. Axon Enterprise Inc. invested capital increased from 2020 to 2021 and from 2021 to 2022.

Cost of Capital

Axon Enterprise Inc., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 14,595,033 14,595,033 ÷ 15,325,833 = 0.95 0.95 × 12.03% = 11.45%
Convertible notes3 687,300 687,300 ÷ 15,325,833 = 0.04 0.04 × 0.99% × (1 – 21.00%) = 0.04%
Operating lease liability4 43,500 43,500 ÷ 15,325,833 = 0.00 0.00 × 5.44% × (1 – 21.00%) = 0.01%
Total: 15,325,833 1.00 11.50%

Based on: 10-K (reporting date: 2022-12-31).

1 US$ in thousands

2 Equity. See details »

3 Convertible notes. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 9,514,802 9,514,802 ÷ 9,541,781 = 1.00 1.00 × 12.03% = 11.99%
Convertible notes3 ÷ 9,541,781 = 0.00 0.00 × 0.00% × (1 – 21.00%) = 0.00%
Operating lease liability4 26,979 26,979 ÷ 9,541,781 = 0.00 0.00 × 2.73% × (1 – 21.00%) = 0.01%
Total: 9,541,781 1.00 12.00%

Based on: 10-K (reporting date: 2021-12-31).

1 US$ in thousands

2 Equity. See details »

3 Convertible notes. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 10,555,589 10,555,589 ÷ 10,579,972 = 1.00 1.00 × 12.03% = 12.00%
Convertible notes3 ÷ 10,579,972 = 0.00 0.00 × 0.00% × (1 – 21.00%) = 0.00%
Operating lease liability4 24,383 24,383 ÷ 10,579,972 = 0.00 0.00 × 3.36% × (1 – 21.00%) = 0.01%
Total: 10,579,972 1.00 12.01%

Based on: 10-K (reporting date: 2020-12-31).

1 US$ in thousands

2 Equity. See details »

3 Convertible notes. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 4,605,697 4,605,697 ÷ 4,616,306 = 1.00 1.00 × 12.03% = 12.00%
Convertible notes3 ÷ 4,616,306 = 0.00 0.00 × 0.00% × (1 – 21.00%) = 0.00%
Operating lease liability4 10,609 10,609 ÷ 4,616,306 = 0.00 0.00 × 3.55% × (1 – 21.00%) = 0.01%
Total: 4,616,306 1.00 12.01%

Based on: 10-K (reporting date: 2019-12-31).

1 US$ in thousands

2 Equity. See details »

3 Convertible notes. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 3,264,443 3,264,443 ÷ 3,277,220 = 1.00 1.00 × 12.03% = 11.98%
Convertible notes3 ÷ 3,277,220 = 0.00 0.00 × 0.00% × (1 – 21.00%) = 0.00%
Operating lease liability4 12,777 12,777 ÷ 3,277,220 = 0.00 0.00 × 0.00% × (1 – 21.00%) = 0.00%
Total: 3,277,220 1.00 11.98%

Based on: 10-K (reporting date: 2018-12-31).

1 US$ in thousands

2 Equity. See details »

3 Convertible notes. See details »

4 Operating lease liability. See details »


Economic Spread Ratio

Axon Enterprise Inc., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Selected Financial Data (US$ in thousands)
Economic profit1 141,242 (113,035) (35,018) (42,215) 2,374
Invested capital2 1,607,800 1,262,920 722,746 500,291 631,660
Performance Ratio
Economic spread ratio3 8.78% -8.95% -4.85% -8.44% 0.38%
Benchmarks
Economic Spread Ratio, Competitors4
Boeing Co. -20.10% -18.74% -30.28% -20.26%
Caterpillar Inc. 0.82% 0.77% -5.35% 0.99%
Eaton Corp. plc -4.80% -4.58% -6.69% -4.00%
GE Aerospace -9.04% -14.02% -4.11% -6.66%
Honeywell International Inc. -1.05% 0.00% -1.43% 2.84%
Lockheed Martin Corp. 13.19% 14.19% 17.49% 18.11%
RTX Corp. -3.19% -2.72% -8.24% 0.25%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

1 Economic profit. See details »

2 Invested capital. See details »

3 2022 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 141,242 ÷ 1,607,800 = 8.78%

4 Click competitor name to see calculations.

Performance ratio Description The company
Economic spread ratio The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. Axon Enterprise Inc. economic spread ratio deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.

Economic Profit Margin

Axon Enterprise Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Selected Financial Data (US$ in thousands)
Economic profit1 141,242 (113,035) (35,018) (42,215) 2,374
 
Net sales 1,189,935 863,381 681,003 530,860 420,068
Add: Increase (decrease) in deferred revenue 156,728 176,131 69,381 24,367 56,151
Adjusted net sales 1,346,663 1,039,512 750,384 555,227 476,219
Performance Ratio
Economic profit margin2 10.49% -10.87% -4.67% -7.60% 0.50%
Benchmarks
Economic Profit Margin, Competitors3
Boeing Co. -15.34% -14.86% -24.80% -9.40%
Caterpillar Inc. 0.79% 0.89% -7.44% 1.07%
Eaton Corp. plc -7.13% -6.87% -10.26% -5.51%
GE Aerospace -8.19% -14.15% -6.57% -9.90%
Honeywell International Inc. -1.38% 0.00% -2.12% 3.30%
Lockheed Martin Corp. 5.32% 6.06% 7.50% 7.77%
RTX Corp. -5.39% -4.84% -16.84% 0.34%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

1 Economic profit. See details »

2 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × 141,242 ÷ 1,346,663 = 10.49%

3 Click competitor name to see calculations.

Performance ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. Axon Enterprise Inc. economic profit margin deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.