Contrasting Axon Enterprise (NASDAQ:AXON) and CAE (NYSE:CAE)

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

Insider and Institutional Ownership

67.4% of CAE shares are owned by institutional investors. Comparatively, 79.1% of Axon Enterprise shares are owned by institutional investors. 18.3% of CAE shares are owned by insiders. Comparatively, 5.7% of Axon Enterprise shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares CAE 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
CAE	$3.28 billion	2.55	$291.29 million	$0.83	31.26
Axon Enterprise	$2.78 billion	14.35	$124.66 million	$1.52	326.39

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for CAE and Axon Enterprise, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CAE	0	4	6	2	2.83
Axon Enterprise	0	3	16	0	2.84

CAE presently has a consensus target price of $34.33, indicating a potential upside of 32.33%. Axon Enterprise has a consensus target price of $762.93, indicating a potential upside of 53.78%. Given Axon Enterprise’s stronger consensus rating and higher possible upside, analysts clearly believe Axon Enterprise is more favorable than CAE.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CAE	7.70%	7.75%	3.57%
Axon Enterprise	4.48%	2.82%	1.26%

Volatility and Risk

CAE has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500. Comparatively, Axon Enterprise has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500.

Summary

Axon Enterprise beats CAE on 8 of the 15 factors compared between the two stocks.

About CAE

CAE Inc., together with its subsidiaries, provides simulation training and critical operations support solutions in Canada, the United States, the United Kingdom, Europe, Asia, the Oceania, Africa, and Rest of the Americas. It operates through two segments, Civil Aviation; and Defense and Security. The Civil Aviation segment offers training solutions for flight, cabin, maintenance, and ground personnel in commercial, business, and helicopter aviation; a range of flight simulation training devices; and ab initio pilot training and crew sourcing services, as well as aircraft flight operations solutions. The Defense and Security segment operates as a training and simulation provider that delivers platform-independent solutions to enable and enhance force readiness and security for defense forces, original equipment manufacturers (OEMs), government agencies, and public safety organizations. The company was formerly known as CAE Industries Ltd. and changed its name to CAE Inc. in 1993. CAE Inc. was incorporated in 1947 and is headquartered in Saint-Laurent, Canada.

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.