NEW YORK (TheStreet) -- The body camera market is anticipating a massive boost in orders if President Barack Obama's proposal to use federal funds to equip police officers around the nation with the technology is approved.
Taser (TASR) CEO Rick Smith, makers of Axon-branded body cameras and electroshock weapons, told TheStreet that since the shooting in Ferguson, Mo., and the ensuing protests, there has been increased interest by police in body cameras and nonlethal weaponry such as Tasers. Smith said that between the second and third quarter of this year the number of departments working with Taser on test programs has tripled.
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Overall, Taser's body camera business has been growing at 200% to 300% per year, and additional Federal funds should increase this even more, Smith said. The company's Taser stun-gun business is also higher by about 10% to 20% per year, he added.
Taser did $15.3 million in sales between its body camera and Evidence.com cloud video storage service last quarter. However, this figure is just for billed orders. Evidence.com also generates after-sale income, so the final tally will be higher, Smith said. Evicence.com is a content management system allowing police departments to store and access the images captured by the cameras. Taser works with about 1,200 police agencies with one of or both of these products, the company said.
These two businesses helped Taser post third-quarter consolidated revenue that rose 26% year over year to $44.3 million.
The federal and matching funds will also draw many new participants into the body camera business, Smith said, although he is confident that Taser's infrastructure and relationship with departments nationwide will keep his company ahead of the competition.
A total of $150 million would be injected into the body camera market: $75 million by the federal government and a $75 million match by local authorities, which is about triple the annual amount spent on body cameras. The $150 million would be enough to buy about 50,000 body cameras.
The potential market for police body cameras is massive.
The Bureau of Labor Statistics says there are about 780,000 police officers in the United States, but only about 15% are equipped with body cameras, according to the privately held police body camera maker Vievu. One reason for this low-level of adoption is many of the local agencies do not have the financial resources to buy this type of equipment.
"The release of federal funds will create a positive impact on the number of agencies now able to purchase cameras for their officers," Steve Lovell, Vievu's president, told TheStreet. "The obstacle most police agencies face is the funding for the body worn camera projects. The recent announcement of federal funding is a huge boost for law enforcement, the agencies and communities wanting this technology."
Vievu currently supplies more than 3,900 agencies in the United States with cameras.
The president's action was spurred by the incident in Ferguson, Mo. when conflicting eyewitness accounts made it difficult for authorities to quickly determine what took place between police officer Darren Wilson and Michael Brown that led to Brown's death.
At the time of publication, the author held no positions in any of the stocks mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
You can view the full analysis from the report here: TASR Ratings Report