TASER (TASR) Stock Soars on Rating Upgrade
NEW YORK (TheStreet) -- TASER International (TASR) stock is up by 9.42% to $18.34 in late afternoon trading on Wednesday, following an upgrade to "buy" from "neutral" at Ladenburg Thalmann this morning.
The firm set a $24 price target on the stock.
Although the company has shown "modest" earnings growth, its free cash flow should lead to roughly $150 million in cash and investments by the end of fiscal 2017, Ladenburg Thalmann's Glenn Mattson said in a note, according to Barron's.
The stock has declined more than 50% from its June all-time high, likely due to lowered earnings estimates, amid higher operational expenses, and stronger competition regarding police body cameras, Mattson adds, Barron's reports. Though these concerns are "valid," they are now priced into the stock.
Mattson notes that he is not prepared to fully endorse TASER's uptick in overseas spending, as he remains "cautious" about the international video segment's potential, Barron's adds. Even so, he thinks the company will win the London Metro Police contract, which might prompt wider adoption in northern Europe.
Based in Scottsdale, AZ, TASER is engaged in development, manufacture and sale of conducted electrical weapons (CEW) designed for use in law enforcement, military, corrections, private security and personal defense.
Separately, TheStreet Ratings team rates TASER INTERNATIONAL INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
We rate TASER INTERNATIONAL INC (TASR) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 1.6%. Since the same quarter one year prior, revenues rose by 13.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- TASR's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.63, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has increased to $19.35 million or 16.00% when compared to the same quarter last year. Despite an increase in cash flow, TASER INTERNATIONAL INC's average is still marginally south of the industry average growth rate of 19.43%.
- The gross profit margin for TASER INTERNATIONAL INC is rather high; currently it is at 61.67%. Regardless of TASR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.01% trails the industry average.
- TASER INTERNATIONAL INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, TASER INTERNATIONAL INC increased its bottom line by earning $0.36 versus $0.34 in the prior year. For the next year, the market is expecting a contraction of 11.1% in earnings ($0.32 versus $0.36).
- You can view the full analysis from the report here: TASR
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.