Axon Enterprise, Inc. AXON recently priced a private offering of $1,750 million for its senior unsecured notes in aggregate. The offering comprises $1,000.0 million of 6.125% senior notes due to expire on March 15, 2030, and $750 million of 6.250% senior notes due to expire on March 15, 2033.

Notably, this reflects an increase from AXON’s previously announced offering size of $1,500 million aggregate principal amount of notes.  Subject to customary closing conditions, this offering is anticipated to close on March 11, 2025.

As communicated by the company, notes due to expire in 2030 and 2033 have been priced at 100% of the principal amount. Interest rates on the notes set to expire in 2030 and 2033 will be paid semi-annually in arrears on March 15 and Sept. 15 of each year, starting from Sept. 15, 2025.

Axon Enterprise plans to use the funds to meet general corporate purposes that include repurchasing or redeeming its 0.50% Convertible Senior Notes due 2027 and investing in product lines, services and technologies.

We believe that the offering of senior notes will increase AXON’s debts and, in turn, might inflate its financial obligations and hurt profitability. However, prepaying part of certain indebtedness will offer some relief. Exiting 2024, its long-term lease liabilities totaled $41.7 million compared with $33.6 million at 2023-end.

AXON’s Zacks Rank & Price Performance

Axon Enterprise, with a $41 billion market capitalization, currently carries a Zacks Rank #3 (Hold). The company is witnessing strength in its TASER segment, driven by solid demand for its TASER 10 devices and higher cartridge revenues. The addition of new users and associated devices to the Axon network and strong response to Axon body cameras and accessories bode well for the Software and Sensors segment’s growth. 

However, escalating operating expenses due to higher compensation expenses and business integration activities have been weighing on its performance. Despite the recent signs of easing, lingering supply-chain disruptions are likely to impede the company’s growth. 

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In the past year, the stock has gained 69.8% compared with the industry’s 24.3% growth.

The Zacks Consensus Estimate for 2025 earnings has decreased 1.8% to $6.38 per share in the past 30 days.

3 Promising Stocks

Some better-ranked stocks from the same space are discussed below.

RBC Bearings Incorporated RBC presently sports a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

It has a trailing four-quarter earnings surprise of 5%, on average. The consensus estimate for RBC’s fiscal 2025 (ending March 2025) earnings has increased 1.2% in the past 30 days.

Leidos LDOS currently carries a Zacks Rank #2 (Buy). LDOS delivered a trailing four-quarter average earnings surprise of 28.3%. In the past 30 days, the Zacks Consensus Estimate for Leidos’ 2025 earnings has increased 1.5%.

Applied Industrial Technologies, Inc. AIT presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 5.3%. 
The Zacks Consensus Estimate for AIT’s fiscal 2025 (ending June 2025) earnings has improved 0.3% in the past 30 days.

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This article originally published on Zacks Investment Research (zacks.com).

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