Is Axon Enterprise, Inc. overvalued or undervalued?

As of 7 May 2025, the valuation grade for Axon Enterprise, Inc. has moved from expensive to very expensive, indicating a significant increase in perceived valuation. The company is currently considered overvalued. Key ratios reflect this sentiment, with a P/E ratio of 207, an EV to EBITDA of 850.03, and a Price to Book Value of 30.38, all of which are substantially higher than industry norms.
In comparison to peers, Axon’s P/E ratio is notably higher than RTX Corp. at 46.92 and Lockheed Martin Corp. at 20.24, both of which are in a more favorable valuation range. Additionally, Axon's EV to EBITDA ratio is significantly above RTX Corp.'s 22.99, further emphasizing its overvaluation. Despite recent strong stock performance, including a 169.02% return over the past year compared to the S&P 500's 10.26%, the current valuation metrics suggest that Axon Enterprise, Inc. is not a prudent investment at this time.