Axon Enterprise (AXON) is poised for bookings growth in Q2 supported by multiple emerging drivers, RBC Capital Markets said in a Monday note.

Analysts project Q2 bookings to grow 2.5% compared with the last quarter to about $14.7 billion, above consensus, supported by the company's continued penetration into US state and local law enforcement as well as its new products, demand for counter-drone platform Dedrone boosted by the Safer Skies Act, international expansion, stronger enterprise demand, and federal opportunities.

Dedrone is a durable multiyear expansion opportunity for Axon's total addressable market due to geopolitical conflicts and enabling legislation, with bookings growing 500% in Q1 from a year ago, the brokerage said.

The company is seeing improved investor sentiment as it moves from being a software and AI disintermediation risk toward becoming a connected platform company with the data infrastructure and customer relationships for deploying AI at scale, analysts said.

The brokerage projected Q2 and full-year revenue to grow 32.5% and 32.2% year over year to $886 million and $3.68 billion respectively, driven by the connected devices segment.

RBC has an outperform rating on the stock, with a price target of $735.

Shares of Axon were down more than 2% in Tuesday trading.

Price: 515.85, Change: -11.63, Percent Change: -2.20