Tags: David N Frazier | Taser International | Stock | Stun Guns

David N. Frazier: Taser Returns to Profitability on New Video Products

By    |   Thursday, 13 February 2014 01:15 PM

You’re probably familiar with Taser International, the maker of stun guns that incapacitate dangerous and combative persons who pose a risk to law-enforcement officers and innocent citizens.

You might not know about its latest gadgets, the TASER AXON camera system and EVIDENCE.com, Taser’s end-to-end on-officer video and digital evidence management solution.

The AXON system utilizes advanced audio-video record and capture devices worn by police officers to record video of critical incidents from the visual perspective of the officer.

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The AXON Flex camera, which was introduced during May 2012, provides complete flexibility in the way that a police officer chooses to wear that device, whether on their shirt collar, cap, helmet, epaulette, or eyewear.

There’s also an option to attach the AXON Flex camera to an Oakley Flak Jacket eyewear.

And, it lets officers use either an Android smartphone or Apple iPhone to review and tag video evidence in an effort to streamline the evidence transfer process.

The AXON body camera, which was launched during the third quarter of 2013, is an ultra-durable on-officer camera that includes a 130-degree wide-angle lens, multiple on-body mounting options, and a single button for recording digital evidence. The AXON body camera is able to capture more evidence than any other body camera, even in the dark.

Taser’s AXON cameras:
  • improve the behavior of all parties involved in police interactions;
  • reduce false complaints and lawsuits by capturing video accurately;
  • save time and increase efficiency — officers spend more time on patrol with automated workflows that reduces their administrative workload.

EVIDENCE.com is a cloud-based digital evidence-management system and warehouse that enables police officers to automatically download and upload video files that were captured with an AXON camera.

With EVIDENCE.com, an officer can store, retrieve, analyze and share digital evidence easily. The system enables police agencies to manage all of their digital evidence in a single and secure location. It accommodates video from many sources, including Taser weapons, smartphones, fixed cameras, and interview rooms.

EVIDENCE.com automates the recording, processing and storage of video using a computer software application to transfer any evidence that’s recorded by the company’s AXON cameras. As a result of that automated system, expensive and time-consuming manual steps that would otherwise be required in the production and movement of evidence among law enforcement and legal professionals are eliminated.

Thousands of law enforcement officers assisted in the development of Taser’s AXON cameras, making it the most customer-driven officer-worn camera application ever produced.

Those cameras have a much lower total cost of ownership than traditional in-car cameras, and they overcome some of the inherent limitations of in-car cameras. Hence, there’s a good chance that police agencies around the world will soon replace their in-car cameras with Taser’s officer-worn AXON cameras.

There’s also a good chance that a large number of police agencies will replace their costly infrastructure of servers, storage devices and network operating systems with Taser’s cloud-based EVIDENCE.com digital evidence-management system. That’s because that system, which is managed by third parties who specialize in infrastructure management, enables police agencies to store, retrieve and analyze video evidence much more efficiently than traditional systems.

As a result of spending substantial amounts of money from 2009 to 2011 to develop its AXON cameras and EVIDENCE.com digital management system, Taser incurred a net loss during each of those years. However, the company returned to profitability during 2012, as the demand for its AXON cameras and camera-equipped stun guns rose sharply.

Specifically, the Scottsdale, Arizona company’s net income rose to $14.7 million (or 27 cents a diluted share) for the year ended Dec. 31, 2012, from a net loss of $7 million (or loss of 12 cents a diluted share) during the prior year, as its revenues rose 27.5 percent to $114.8 million.

For the nine months ended Sept. 30, 2013, the company’s revenues and net earnings a diluted share rose 18.4 percent and 26.3 percent, respectively, as compared to the same period during 2012.

Meanwhile, Taser is very strong financially, with its cash and short-term investments alone covering all of the company’s financial obligations as of Sept. 30, 2013. That huge cash position enables Taser to continue to buy back large shares of its stock, after acquiring $25 million of its stock during 2013, to develop other products, and/or to market its current products aggressively to police agencies around the globe.

Although the company’s stock appears to be a bit pricey at this time, with an estimated price/earnings to growth (PEG) ratio of approximately 1.2 as of Feb. 12, my research indicates that Taser’s earnings growth will accelerate over the next two years and that its stock will trend substantially higher than its current level of around $16.70 over the next 12-18 months.

Therefore, I would encourage investors and speculators to allocate a portion of their money to Taser stock (TASR).

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David N. Frazier has an extensive background in the investment securities industry and has invested in the financial markets for more than 25 years.

In addition to working as a business analyst, merchant banking analyst and equity research analyst, he’s held positions in sales and marketing at institutional investment firms, including William O’Neil & Co., TDAmeritrade, and Merrill Lynch.

David now serves as the president and chief market strategist of Frazier & Mayer Research, LLC (dba www.TheMarketMonk.com), an independent investment research firm that provides research and analytical services to hedge funds, investment advisory firms, and other investment newsletters.


David and/or his firm, Frazier & Mayer Research, LLC have previously recommended Taser (TASR) to his / the firm's clients.

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Headline
You're probably familiar with Taser International, the maker of stun guns that incapacitate dangerous and combative persons who pose a risk to law enforcement officers and innocent citizens.
David N Frazier,Taser International,Stock,Stun Guns
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2014-15-13
Thursday, 13 February 2014 01:15 PM
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