Critical Analysis: Axon Enterprise (NASDAQ:AXON) & Redwire (NYSE:RDW)

Redwire (NYSE:RDW) and Axon Enterprise (NASDAQ:AXON) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Analyst Recommendations

This is a summary of recent ratings and price targets for Redwire and Axon Enterprise, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Redwire	2	4	5	1	2.42
Axon Enterprise	0	2	14	1	2.94

Redwire presently has a consensus target price of $14.69, suggesting a potential upside of 45.35%. Axon Enterprise has a consensus target price of $721.57, suggesting a potential upside of 76.71%. Given Axon Enterprise’s stronger consensus rating and higher probable upside, analysts plainly believe Axon Enterprise is more favorable than Redwire.

Profitability

This table compares Redwire and Axon Enterprise’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Redwire	-57.26%	-11.02%	-8.17%
Axon Enterprise	6.19%	2.84%	1.36%

Earnings & Valuation

This table compares Redwire and Axon Enterprise”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Redwire	$335.38 million	7.53	-$226.55 million	($1.46)	-6.92
Axon Enterprise	$2.78 billion	11.93	$124.66 million	$2.41	169.43

Axon Enterprise has higher revenue and earnings than Redwire. Redwire is trading at a lower price-to-earnings ratio than Axon Enterprise, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Redwire has a beta of 3.12, meaning that its share price is 212% more volatile than the S&P 500. Comparatively, Axon Enterprise has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500.

Insider & Institutional Ownership

8.1% of Redwire shares are owned by institutional investors. Comparatively, 79.1% of Axon Enterprise shares are owned by institutional investors. 0.8% of Redwire shares are owned by company insiders. Comparatively, 4.2% of Axon Enterprise shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Axon Enterprise beats Redwire on 13 of the 14 factors compared between the two stocks.

About Redwire

Redwire Corporation provides critical space solutions and space infrastructure for government and commercial customers in the United States, Europe, and internationally. The company provides avionics and sensors including star trackers, sun sensors, critical for navigation, and control of spacecraft; camera systems; solar array solutions for spacecraft spanning the spectrum of size, power needs, and orbital location; and strain composite booms, coilable booms, truss structures, telescope baffles, and deployable booms to position sensors or solar arrays away from the spacecraft. It offers software suite that enables digital engineering and generation of high-fidelity, interactive modeling and simulations of individual components, entire spacecraft, and full constellations in a cloud-based environment. In addition, the company microgravity payloads, radio frequency systems, antennas, star trackers, platforms, and in-space manufacturing and biotech facilities. Redwire Corporation is headquartered in Jacksonville, Florida.

About Axon Enterprise

Axon Enterprise, Inc. develops, manufactures, and sells conducted energy devices (CEDs) under the TASER brand in the United States and internationally. It operates through two segments, Software and Sensors, and TASER. The company also offers hardware and cloud-based software solutions that enable law enforcement to capture, securely store, manage, share, and analyze video and other digital evidence. Its products include axon officer safety plan; taser 10, taser7, taser X26P, taser X2, taser 7 CQ, and civilian series; cameras, such as axon body, axon flex, axon fleet, axon air, axon signal sidearm, axon signal vehicle, axon interview, and axon interview portable kit; software, including axon records, evidence, standards, commander, performance, auto-transcribe, justice, investigate, respond, and justice, my90, and redaction assistant; mobile applications, and training services, as well as hardware extended warranties; and Axon docks, cartridges, and batteries. The company sells its products through its direct sales, distribution partners, online store, and third-party resellers. Axon Enterprise, Inc. has a strategic partnership with Fusus, Inc. to expand bility to aggregate live video, data, and sensor feeds. It serves law enforcement, federal, correction, fire, EMS, campus, justice healthcare, retail, private security, and personal safety industries. The company was formerly known as TASER International, Inc. and changed its name to Axon Enterprise, Inc. in April 2017. Axon Enterprise, Inc. was incorporated in 1993 and is headquartered in Scottsdale, Arizona.