Perilous Reversal Watch: Taser International (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.

Trade-Ideas LLC identified Taser International ( TASR) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Taser International as such a stock due to the following factors:

  • TASR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $31.5 million.
  • TASR has traded 271,029 shares today.
  • TASR is down 5% today.
  • TASR was up 9.7% yesterday.

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More details on TASR:

TASER International, Inc. is engaged in the development, manufacture, and sale of conducted electrical weapons (CEWs) for use in law enforcement, federal, military, corrections, private security, and personal defense markets worldwide. TASR has a PE ratio of 42.1. Currently there are 3 analysts that rate Taser International a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for Taser International has been 1.0 million shares per day over the past 30 days. Taser International has a market cap of $730.7 million and is part of the industrial goods sector and aerospace/defense industry. The stock has a beta of -0.25 and a short float of 7% with 1.33 days to cover. Shares are down 7.6% year-to-date as of the close of trading on Monday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Taser International as a 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 solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, premium valuation and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 1.3%. Since the same quarter one year prior, revenues rose by 15.5%. 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 3.54, which clearly demonstrates the ability to cover short-term cash needs.
  • Compared to its closing price of one year ago, TASR's share price has jumped by 36.08%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Aerospace & Defense industry average. The net income has decreased by 12.9% when compared to the same quarter one year ago, dropping from $4.46 million to $3.88 million.
  • Net operating cash flow has significantly decreased to $1.65 million or 78.55% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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