Taser International Inc Stock Downgraded (TASR)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- Taser International (Nasdaq: TASR) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we also find weaknesses including premium valuation, weak operating cash flow and disappointing return on equity.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 18.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant 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 3.41, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for TASER INTERNATIONAL INC is rather high; currently it is at 64.58%. 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, TASR's net profit margin of 9.37% compares favorably to the industry average.
  • Net operating cash flow has declined marginally to $4.31 million or 4.64% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

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