Home > Comparison > Industrials > LMT vs AXON
The strategic rivalry between Lockheed Martin Corporation and Axon Enterprise, Inc. shapes the aerospace and defense sector’s evolution. Lockheed Martin operates as a capital-intensive industrial giant focused on aerospace systems and defense technology. In contrast, Axon Enterprise emphasizes high-margin, technology-driven public safety solutions. This analysis explores their divergent operational models and competitive strengths to identify which company offers a superior risk-adjusted investment profile for diversified portfolios in 2026.
Table of contents
Companies Overview
Lockheed Martin and Axon Enterprise represent two critical forces in the aerospace and defense sector, each shaping modern security technologies.
Lockheed Martin Corporation: Aerospace & Defense Giant
Lockheed Martin dominates as a global aerospace and defense leader. It generates revenue through advanced technology systems across four segments: Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space. In 2026, its strategic focus remained on integrating space and ground-based systems to enhance national security and deliver situational awareness solutions.
Axon Enterprise, Inc.: Law Enforcement Technology Innovator
Axon Enterprise leads in conducted energy devices and digital evidence management. Its core revenue comes from TASER products and software that securely capture and analyze law enforcement data. In 2026, Axon emphasized expanding real-time operational awareness through a strategic partnership to enhance cloud-based crime center solutions.
Strategic Collision: Similarities & Divergences
Lockheed Martin pursues a broad defense systems approach with a closed ecosystem of advanced aerospace technologies. Axon focuses on a specialized open infrastructure for law enforcement tools and digital evidence. They compete primarily in public safety and security technology, but Lockheed’s scale contrasts sharply with Axon’s innovation-driven niche. Their investment profiles differ markedly: Lockheed offers stability and deep government ties, while Axon carries growth potential amid evolving law enforcement needs.
Income Statement Comparison
This data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | Lockheed Martin Corporation (LMT) | Axon Enterprise, Inc. (AXON) |
|---|---|---|
| Revenue | 75B | 2.08B |
| Cost of Revenue | 67.4B | 841M |
| Operating Expenses | -103M | 1.18B |
| Gross Profit | 7.62B | 1.24B |
| EBITDA | 7.75B | 437M |
| EBIT | 7.04B | 389M |
| Interest Expense | 1.12B | 7.1M |
| Net Income | 5.02B | 377M |
| EPS | 21.56 | 4.98 |
| Fiscal Year | 2025 | 2024 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison exposes each company’s operational efficiency and growth momentum, revealing their core financial engines.
Lockheed Martin Corporation Analysis
Lockheed Martin’s revenue grew steadily from 67.0B in 2021 to 75.1B in 2025, but net income declined from 6.3B to 5.0B. Gross and net margins contracted, with the latest net margin at 6.68%, signaling margin pressure. Despite solid revenue growth, earnings and EPS faced headwinds, reflecting margin squeeze and lower profitability momentum.
Axon Enterprise, Inc. Analysis
Axon showed explosive revenue growth from 681M in 2020 to 2.08B in 2024, with net income surging from a loss to 377M. Margins expanded significantly, boasting a 59.6% gross margin and 18.1% net margin in 2024. The company accelerated profit growth, with EBIT and EPS more than doubling year-over-year, demonstrating strong operational leverage and scaling efficiency.
Steady Scale vs. Rapid Margin Expansion
Lockheed Martin delivers steady revenue scale but suffers declining profitability and margin compression. Axon drives rapid top-line and bottom-line expansion with superior margin improvement. Axon’s profile appeals to investors prioritizing high growth and margin gains, while Lockheed’s steady scale suits those favoring established revenue bases despite margin challenges.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose the underlying fiscal health, valuation premiums, and capital efficiency of the companies analyzed:
| Ratios | Lockheed Martin (LMT) | Axon Enterprise (AXON) |
|---|---|---|
| ROE | 74.6% | 16.2% |
| ROIC | 17.4% | 1.7% |
| P/E | 22.3 | 119.4 |
| P/B | 16.6 | 19.3 |
| Current Ratio | 1.09 | 1.37 |
| Quick Ratio | 0.94 | 1.21 |
| D/E | 0.17 | 0.60 |
| Debt-to-Assets | 2.0% | 31.3% |
| Interest Coverage | 6.9 | 8.2 |
| Asset Turnover | 1.25 | 0.47 |
| Fixed Asset Turnover | 8.46 | 8.42 |
| Payout ratio | 62.4% | 0% |
| Dividend yield | 2.80% | 0% |
| Fiscal Year | 2025 | 2024 |
Efficiency & Valuation Duel: The Vital Signs
Ratios act as a company’s DNA, exposing hidden risks and operational excellence beyond surface-level financials.
Lockheed Martin Corporation
Lockheed Martin posts a strong 74.65% ROE and a favorable 17.39% ROIC, signaling efficient capital use. Its P/E of 22.26 appears fairly priced relative to industry norms. The 2.8% dividend yield rewards shareholders steadily, reflecting disciplined capital allocation without overextension.
Axon Enterprise, Inc.
Axon shows a modest 16.2% ROE but an unfavorable 1.66% ROIC, implying less efficient capital deployment. The stock trades at a stretched P/E of 119.4, reflecting high growth expectations. It pays no dividend, reinvesting heavily in R&D to drive future expansion, increasing operational leverage risks.
Premium Valuation vs. Operational Safety
Lockheed Martin offers a better balance of robust returns and reasonable valuation, with a consistent dividend enhancing shareholder value. Axon’s high valuation and reinvestment strategy suggest growth potential but carry elevated risks. Conservative investors may prefer Lockheed’s stable profile, while growth seekers might find Axon’s trajectory appealing.
Which one offers the Superior Shareholder Reward?
I compare Lockheed Martin Corporation (LMT) and Axon Enterprise, Inc. (AXON) on shareholder returns through dividends and buybacks. LMT pays a steady 2.8% dividend yield, with a sustainable 62% payout ratio covered 1.8x by free cash flow. It also executes consistent buybacks, balancing income and capital return. AXON pays no dividends, reinvesting heavily in R&D and growth, reflected in high margins but sky-high valuation multiples (P/E ~119). Buybacks are minimal, limiting immediate shareholder reward. I view LMT’s distribution model as more sustainable and attractive for total return in 2026, offering steady income plus buybacks versus AXON’s growth gamble.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of both Lockheed Martin Corporation and Axon Enterprise, Inc., highlighting their core financial strengths and vulnerabilities:
Lockheed Martin shows a balanced profile with strong ROE (5) and ROA (4), supported by a solid DCF score (4). Its moderate debt-to-equity (3) and weak valuation metrics (PE 2, PB 1) suggest some market skepticism. Axon lags with moderate scores across the board and notably poor valuation scores (PE 1, PB 1), indicating reliance on growth potential rather than financial efficiency.
Bankruptcy Risk: Solvency Showdown
Lockheed Martin’s Altman Z-Score of 3.69 versus Axon’s 9.17 places both firms firmly in the safe zone:
Axon’s exceptionally high score signals very strong solvency, while Lockheed Martin remains comfortably stable. Both companies demonstrate resilience against bankruptcy risks in this market cycle.
Financial Health: Quality of Operations
Lockheed Martin’s Piotroski F-Score of 6 outperforms Axon’s 4, indicating better internal financial health and operational quality:
While both firms score in the average range, Axon’s lower score flags potential weaknesses in profitability or leverage metrics, whereas Lockheed Martin shows fewer red flags in its fundamentals.
How are the two companies positioned?
This section dissects LMT and AXON’s operational DNA by comparing revenue distribution and internal dynamics. The goal is to confront their economic moats to reveal the more resilient competitive advantage.
Revenue Segmentation: The Strategic Mix
This comparison dissects how Lockheed Martin and Axon Enterprise diversify their income streams and highlights their primary sector bets:
Lockheed Martin anchors revenue in Aeronautics with $30.3B, but balances it with sizable Space ($13B), Rotary and Mission Systems ($17.3B), and Missiles & Fire Control ($14.5B). Axon Enterprise pivots mainly on Software and Sensors ($951M) and TASER ($613M). Lockheed’s diversified portfolio reduces concentration risk, leveraging defense ecosystem lock-in. Axon’s focus on two segments signals growth potential but higher dependency risk amid evolving tech demands.
Strengths and Weaknesses Comparison
This table compares the strengths and weaknesses of Lockheed Martin Corporation and Axon Enterprise, Inc.:
Lockheed Martin Strengths
- Diverse revenue streams across Aeronautics, Missiles, Space, and Mission Systems
- Strong ROE of 74.65% and ROIC of 17.39% indicating efficient capital allocation
- Favorable debt metrics with low debt-to-assets at 1.95% and good interest coverage
- Global presence with significant revenues from the US, Europe, Asia Pacific, and Middle East
Axon Enterprise Strengths
- High net margin of 18.1% reflecting strong profitability
- Favorable quick ratio at 1.21 and excellent interest coverage at 54.75
- Focused innovation in Software, Sensors, and TASER products
- Growing US-based revenue stream with expanding international sales
Lockheed Martin Weaknesses
- Neutral net margin at 6.68% may limit profit expansion
- Unfavorable high price-to-book ratio of 16.62 suggests potential overvaluation
- Current and quick ratios near 1 indicate limited liquidity buffer
- Heavy US revenue concentration may limit diversification
Axon Enterprise Weaknesses
- Low ROIC of 1.66% below WACC of 10.18% signals weak capital returns
- High PE ratio of 119.4 and PB of 19.34 indicate expensive valuation
- Asset turnover at 0.47 suggests less efficient asset use
- No dividend yield restricts income for investors
Lockheed Martin exhibits strength in diversified revenue and solid capital efficiency, supporting resilience in market cycles. Axon shows strong profitability but faces challenges in capital returns and valuation. Both companies’ strategic focus reflects their industry positioning and financial health.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat protects long-term profits from competition’s erosion. Only a durable competitive advantage ensures sustainable earnings growth:
Lockheed Martin Corporation: Intangible Assets & Government Contracts Moat
Lockheed Martin’s moat stems from specialized defense contracts and intangible assets like classified technologies. This yields stable margins and a ROIC well above WACC. However, its declining ROIC signals pressure on profitability. New space and missile defense projects could either deepen or strain this moat in 2026.
Axon Enterprise, Inc.: Innovation-Driven Network Effects Moat
Axon’s moat arises from its integrated hardware-software ecosystem, fostering network effects with law enforcement agencies. Despite ROIC below WACC, its rapid ROIC growth and margin expansion reflect a strengthening moat. Future cloud-based crime center expansions could accelerate market disruption.
Strategic Moat Showdown: Intangible Assets vs. Innovation Ecosystem
Lockheed Martin holds a wider moat grounded in government barriers and classified tech, but its profitability is slipping. Axon’s moat is narrower but deepening fast, fueled by innovation and network effects. Lockheed Martin remains better positioned today to defend its market share amid competitive challenges.
Which stock offers better returns?
The past year shows strong gains for both stocks, with Lockheed Martin accelerating sharply while Axon’s rally slows amid recent decline.
Trend Comparison
Lockheed Martin’s stock gained 46.5% over the past 12 months, showing a bullish trend with accelerating momentum and a high price fluctuation range between 421 and 634.
Axon’s stock rose 54.6% overall but is decelerating, with a recent 12.77% drop over the last two and a half months despite a wider volatility band from 280 to 842.
Axon delivered higher total returns over 12 months, but Lockheed Martin shows stronger recent acceleration and buyer dominance, indicating differing momentum profiles.
Target Prices
Analysts present a mixed but constructive target consensus for Lockheed Martin and Axon Enterprise.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| Lockheed Martin Corporation | 519 | 695 | 599 |
| Axon Enterprise, Inc. | 713 | 900 | 815 |
Lockheed Martin’s consensus target of $599 sits slightly below its current price of $634, suggesting moderate upside risk. Axon’s consensus target of $815 significantly exceeds its $484 market price, indicating strong growth expectations from analysts.
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How do institutions grade them?
Lockheed Martin Corporation Grades
Here are the recent institutional grades for Lockheed Martin Corporation:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| RBC Capital | Maintain | Sector Perform | 2026-01-30 |
| TD Cowen | Maintain | Hold | 2026-01-30 |
| UBS | Maintain | Neutral | 2026-01-15 |
| Citigroup | Maintain | Neutral | 2026-01-13 |
| Jefferies | Maintain | Hold | 2026-01-12 |
| Truist Securities | Upgrade | Buy | 2026-01-09 |
| JP Morgan | Downgrade | Neutral | 2025-12-19 |
| Morgan Stanley | Downgrade | Equal Weight | 2025-12-16 |
| UBS | Maintain | Neutral | 2025-10-22 |
| Bernstein | Maintain | Market Perform | 2025-10-20 |
Axon Enterprise, Inc. Grades
Here are the recent institutional grades for Axon Enterprise, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Morgan Stanley | Maintain | Overweight | 2025-12-17 |
| Barclays | Maintain | Overweight | 2025-11-06 |
| Piper Sandler | Maintain | Overweight | 2025-11-05 |
| UBS | Maintain | Neutral | 2025-11-05 |
| Goldman Sachs | Maintain | Buy | 2025-11-05 |
| JMP Securities | Maintain | Market Outperform | 2025-09-29 |
| Needham | Maintain | Buy | 2025-09-24 |
| B of A Securities | Maintain | Buy | 2025-08-06 |
| Raymond James | Maintain | Outperform | 2025-08-05 |
| Craig-Hallum | Upgrade | Buy | 2025-08-05 |
Which company has the best grades?
Axon Enterprise holds generally stronger grades, with multiple “Buy,” “Overweight,” and “Outperform” ratings. Lockheed Martin’s grades cluster around “Hold” and “Neutral,” which may suggest more cautious sentiment. Investors might view Axon’s ratings as signaling higher growth expectations.
Risks specific to each company
The following categories identify critical pressure points and systemic threats facing Lockheed Martin Corporation and Axon Enterprise, Inc. in the 2026 market environment:
1. Market & Competition
Lockheed Martin Corporation
- Dominates aerospace and defense with strong government contracts, but faces cyclical defense budgets and competitive innovation risks.
Axon Enterprise, Inc.
- Operates in law enforcement tech with growth potential but faces intense competition and rapid tech evolution risks.
2. Capital Structure & Debt
Lockheed Martin Corporation
- Maintains a low debt ratio (D/E 0.17) and strong interest coverage (6.3), indicating prudent leverage use.
Axon Enterprise, Inc.
- Higher leverage (D/E 0.6) with strong interest coverage (54.75), but riskier due to more debt relative to equity.
3. Stock Volatility
Lockheed Martin Corporation
- Low beta (0.245) signals stock stability, appealing for conservative investors.
Axon Enterprise, Inc.
- High beta (1.414) reflects significant stock price volatility and higher market sensitivity.
4. Regulatory & Legal
Lockheed Martin Corporation
- Faces complex defense regulations and export controls, but has extensive compliance experience.
Axon Enterprise, Inc.
- Subject to law enforcement and privacy regulations, with emerging legal scrutiny on surveillance tech.
5. Supply Chain & Operations
Lockheed Martin Corporation
- Global supply chain exposed to geopolitical disruptions; operational scale helps mitigate risks.
Axon Enterprise, Inc.
- Smaller scale but dependent on advanced tech components, vulnerable to supplier constraints.
6. ESG & Climate Transition
Lockheed Martin Corporation
- Increasing pressure to adopt green tech in defense; gradual ESG integration underway.
Axon Enterprise, Inc.
- Faces rising ESG demands on privacy and ethical tech use; early in climate transition efforts.
7. Geopolitical Exposure
Lockheed Martin Corporation
- Heavy reliance on U.S. government and allied foreign military sales exposes it to geopolitical shifts.
Axon Enterprise, Inc.
- Primarily U.S.-focused but expanding internationally, less exposed to global geopolitical risks.
Which company shows a better risk-adjusted profile?
Lockheed Martin’s key risk lies in government budget cycles and geopolitical dependencies, but it counters with a robust balance sheet and low stock volatility. Axon faces tech disruption and regulatory risks amplified by high valuation multiples and stock volatility. Lockheed Martin’s superior capital structure and stable market position grant it a stronger risk-adjusted profile. Its low beta and favorable leverage metrics underline prudent risk management in a volatile 2026 environment.
Final Verdict: Which stock to choose?
Lockheed Martin’s superpower lies in its robust capital efficiency and consistent value creation, reflected in a strong ROIC well above its cost of capital. Its point of vigilance is the declining profitability trend, which could pressure future earnings. This stock suits investors seeking steady income and long-term stability in a portfolio anchored by established defense industry leaders.
Axon Enterprise commands a strategic moat rooted in rapid revenue growth and high net margins, fueled by innovative technology and recurring revenue streams. However, its high valuation multiples and negative value creation signal caution. Axon fits growth-oriented portfolios that can tolerate volatility for exposure to disruptive, high-growth tech plays.
If you prioritize capital efficiency and steady value creation, Lockheed Martin is the compelling choice due to its proven moat and financial discipline. However, if you seek robust growth potential and can accept elevated risk, Axon offers superior expansion prospects despite weaker profitability metrics. Both present distinct analytical scenarios tailored to different investor profiles.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Lockheed Martin Corporation and Axon Enterprise, Inc. to enhance your investment decisions:
