AAR (NYSE:AIR) vs. Axon Enterprise (NASDAQ:AXON) Critical Review

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

Insider & Institutional Ownership

90.7% of AAR shares are held by institutional investors. Comparatively, 79.1% of Axon Enterprise shares are held by institutional investors. 3.6% of AAR shares are held by company insiders. Comparatively, 4.4% of Axon Enterprise shares are held 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AAR	1.01%	12.43%	5.20%
Axon Enterprise	13.64%	6.80%	3.18%

Volatility and Risk

AAR has a beta of 1.5, meaning that its share price is 50% more volatile than the S&P 500. Comparatively, Axon Enterprise has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for AAR and Axon Enterprise, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AAR	0	0	4	0	3.00
Axon Enterprise	0	3	14	0	2.82

AAR presently has a consensus price target of $86.00, indicating a potential upside of 5.20%. Axon Enterprise has a consensus price target of $841.64, indicating a potential upside of 20.58%. Given Axon Enterprise’s higher probable upside, analysts plainly believe Axon Enterprise is more favorable than AAR.

Valuation & Earnings

This table compares AAR and Axon Enterprise”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AAR	$2.78 billion	1.06	$12.50 million	$0.78	104.80
Axon Enterprise	$2.39 billion	22.91	$377.03 million	$4.05	172.35

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

Summary

Axon Enterprise beats AAR on 8 of the 14 factors compared between the two stocks.

About AAR

AAR Corp. provides products and services to commercial aviation, government, and defense markets worldwide. The Parts Supply segment leases and sells aircraft components and replacement parts. The Repair & Engineering segment provides airframe maintenance services, such as airframe inspection, painting, line maintenance, airframe modification, structural repair, avionics service and installation, exterior and interior refurbishment, and engineering and support services; component repair services comprising maintenance, repair, and overhaul (MRO) services, engine and airframe accessories, and interior refurbishment; and landing gear overhaul services, including repair services on wheels and brakes. This segment also develops specific aircraft components and parts; and designs proprietary designated engineering representative repairs. The Integrated Solutions segment engages in the fleet management and operation of customer-owned aircraft; provision of supply chain logistics services, such as material planning, sourcing, logistics, information and program management, and parts and component repair and overhaul services; and flight hour component inventory and repair services. In addition, the segment provides integrated software solutions comprising Trax, a cloud-based electronic enterprise resource platform, as well as a suite of paperless mobility apps for automating MRO workflows. The Expeditionary Services segment designs, manufactures, and repairs transportation pallets; and containers and shelters for military and humanitarian tactical deployment activities, including armories, supply and parts storage, refrigeration systems, tactical operation centers, briefing rooms, laundry and kitchen facilities, water treatment, and sleeping quarters, as well as engages in provision of engineering, design, and system integration services for specialized command and control systems. AAR Corp. was founded in 1951 and is headquartered in Wood Dale, Illinois.

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.