Axon Enterprise has closed a US$1b offering of 0% convertible senior notes due 2031, a funding move that has sharpened investor focus on dilution risk and the company's expanding acquisition war chest. The share price reaction has been sharp, with Axon Enterprise down 9.81% on a 1-day share price return basis and 26.85% over 30 days, while still showing a 4.41% 90-day share price return. Recent headlines around the US$1b zero coupon convertible notes and a larger revolving credit facility have amplified worries about dilution and leverage. Axon Enterprise closed at $442.08, compared with a widely followed fair value estimate of $693.40 that leans on long-term bookings, recurring software and a rich contract pipeline. The stock trades on a P/S ratio of 11.2x, compared with 4x for the wider US Aerospace & Defense group and 16.4x for its peer set, while the fair ratio sits at 14.2x.
Axon Enterprise Inc.Axon closed a $1b zero-coupon convertible notes offering, sharpening investor focus on dilution risk and leverage.
