Axon Enterprise (AXON) is expected to report in-line Q3 results amid a seasonally soft quarter, with focus likely to be on its margin, RBC Capital Markets said in a Monday note.

The note said adjusted EBITDA margin is expected to trough in Q3 at 24.5%, with margin expansion resuming in Q4 as the company scales to meet its 2026 guidance of 25.5%.

The report said Q3 estimate reflects several transitory

headwinds including elevated component costs, the absence of a one-time tariff refund, and continued mix pressure.

The note also pointed to a stock sell-off intra-quarter on the back of its convertible offering and De-Flock narrative.

"We view this as near-term noise -- fundamentals remain strong, creating an attractive entry point," the report said. RBC kept its outperform rating with a price target of $735.

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