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Taser's Top Line Was Impressive And Investors Responding In Part, But Competition Concerns Remain

Taser TASR: Will Increasing Competition In Bodyworn Cameras Damper Taser? Q3's Top Line Impressed, But Future Success Not Certain

TASER International, Inc. NASDAQTASR reported robust Q3:16 results, with the revenue beating the estimate and the consensus.

Ladenburg Thalmann’s Glenn G. Mattson maintains a Neutral rating on the company.

Q3 Results

Taser reported its Q3:16 revenue at $71.9 million, beating expectations, while the non-GAAP EPS came in at $0.09, in line with the consensus forecast, hurt by legal expense of $2 million and a meaningfully higher tax rate.

“3Q:16 was another very strong quarter for weapons which came in nearly $10 million above our forecast but was aided by revenue recognition policies under the newer weapons payment plan program which recognizes both 5 years of recurring weapons and cartridge revenue up front,” Mattson mentioned.

The company’s more than doubled its profit in Q3, driven by robust sales of its products, including video and body cameras.

Cartridge units grew 25 percent year-over-year, while sales of the X2 and X26 rose 64 percent year-over-year.

Increasing Competition

However, the analyst expressed concern regarding increasing competition, stating, “With recent wins in Phoenix and NYC, from lower cost competitor Vievu, may be able to prevent TASR from achieving the type of market position that we believe the company’s valuation is assuming.”

Taser also announced that its chief financial officer, Fan Behrendt, plans to step down from his position “to pursue other opportunities,” and the company was in the process of seeking a replacement.

Although the company has not provided any guidance for 2017, management did indicate toward continuing to spend to “ensure a larger overall market position especially in Europe,” Mattson said.

At last check in Thursday's morning session, Taser was up 13.59 percent at $26.89.

DateFirmActionFromTo
Oct 2016Imperial CapitalInitiates Coverage OnOutperform
Oct 2016Ladenburg ThalmannDowngradesBuyNeutral
Jul 2016CL KingUpgradesNeutralBuy

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