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Ladenburg Raises Taser's Price Target To $31, Cheers Videos Shipments

TASER International, Inc. TASR reported strong 2Q16 results, and has a “significant potential growth driver,” Ladenburg’s Glenn G. Mattson said in a report. He reiterated a Buy rating on the company, while raising the price target from $28 to $31.

Taser reported revenue of $58.8 million, ahead of the Ladenburg estimate by $1.8 million. Non-GAAP EPS came in-line with expectations, at $0.09. The quarterly results were boosted by strength in conducted electrical weapons [CEWs], which recorded 19 percent y/y sales growth for the second straight quarter.

“Last quarter, TASR benefited from one large international order of about $6 million, and in 2Q the company saw its largest domestic order ever of $5 million from an undisclosed customer in the core end market,” analyst Glenn Mattson wrote.

Significant Potential Growth Driver

Although the video segment posted disappointing service revenue in 2Q, a large portion of the cameras were shipped in June, lowering their overall contribution during the second quarter, Mattson mentioned. Taser indicated that it shipped 10,000 cameras in July, versus 13,500 for the entire second quarter.

The analyst expressed optimism regarding “rapid growth” in service revenue in 3Q16, while adding that the opportunity for Taser to penetrate the in-car market represents “a significant potential growth driver.” The US opportunity comprises of “several hundred thousand cars,” with the hardware priced at $500 and a per month payment of $39 for the license and storage.

Taser is conducting paid trials and should begin to generate revenue from this new offering by yearend 2016, Mattson believes. He added, “While it may take some time for this market to gain traction (as it did for on-officer video), this opportunity represents a significant expansion of the overall addressable market.”

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DateFirmActionFromTo
Jul 2016CL KingUpgradesNeutralBuy
Jan 2016JP MorganUpgradesNeutralOverweight
Nov 2015Ladenburg ThalmannUpgradesNeutralBuy

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