Taser's Hitting The Mark, And Jeffco's Call Will Stun Bears

| About: TASER International, (TASR)

Jefferies is out with a call on Taser (NASDAQ:TASR) upping their target to $20 from $13.

According to the firm, the company has announced orders for approximately 7,500 Taser X26 units, which when combined with initial cartridge sales and accessories should bring in about $7.5 million. Last quarter, the company did not announce any significant orders and was able to ship close to 12,000 X26 units and record total revenue of $15 million. Assuming the volume of underlying smaller order sizes for Tasers has been healthy, they believe the company has received enough orders to at least meet firm's high-end revenue estimate of $22 million. They also see couple of cents of upside to their $0.04 EPS est.

Inflection Point? Jeffco believes "yes" and is increasing '08 EPS by a penny accordingly. Over 44 countries have started a Taser program, and there are countries like France that may aggressively roll out Tasers to their officers. The penetration rate of the U.S. law enforcement market is about 25%, and there are large cities like Chicago that are warming to the product.

The question to which they do not have an answer is whether the business acceleration looks like a hockey stick (steep acceleration), a slow building exponential graph (flatter acceleration), or more of an upward moving sine wave (lumpy). Bottom line is the business is improving, and many future catalysts exist.

TASR has been on fire over the past couple of months, and I suspect Jeffco's call will yield some nice upside today and over the next couple of weeks.

TASR 1-yr chart:


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