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TASER (TASR) Has Further Upside on Video Segment Business After Ferguson Events, JPMorgan Says

August 19, 2014 12:32 PM EDT
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Price: $21.90 --0%

Rating Summary:
    3 Buy, 4 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 20 | Down: 14 | New: 22
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JPMorgan analyst Paul Coster put into print what the market has been speculating about over the past few sessions on TASER International (NASDAQ: TASR) - that the company will benefit from the events in Ferguson, Missouri.

Coster believes the 16% run-up in the stock over the past two days is in fact related to investor anticipation that the recent events in Ferguson, Missouri could spur wider adoption of on-officer video. He belives this is a solution that provides compelling benefits for both police officers and citizens.

"On-officer video is still in its infancy but appears to be accelerating and we think that TASR is well positioned to be a market leader in the space," the analyst said. "We believe there is further upside for the stock, supported by acceleration in the video segment, and a domestic upgrade and first-time adoption internationally in the weapons segment."

The analyst notes that traditional method of in-dash video only captures a fraction of police incidents, with ~90% of incidents occurring out of the view from the front of a police car. "Given the widespread adoption of smartphones with video capabilities that can be used by bystanders to capture a police incident, it has become increasingly important for the officer to provide video evidence captured from his/her point of view, capturing not only the incident itself, but also the events that led up to the incident," he said.

Coster notes the results from agencies that have trialed or fully deployed on-officer video is compelling: "59% reduction in “use of force” by officers, and a 93% reduction in litigation expenses (US agencies spend ~$2.5b annually in complaint settlements)."

The analyst notes Taser's offering consists of an upfront hardware sale ($300- 500) and recurring revenues for Evidence.com ($200-$500 per officer per year).

"We believe the company is uniquely positioned to address the market owing to its strong relationship with police agencies for the weapons business; TASR weapons are present in ~16k of the ~18k police agencies in the US. Large agencies that have at least partially adopted Evidence.com include Las Vegas, New Orleans, Albuquerque, etc," he said. "We believe international adoption could also provide further upside; the London Metropolitan Police recently began a 500-unit pilot."

The analyst also note that they will be hosting a conference call with TASR’s CEO on September 10th.

The firm maintained an Overweight rating and price target of $17 on the stock.

For an analyst ratings summary and ratings history on TASER International click here. For more ratings news on TASER International click here.

Shares of TASER International closed at $14.68 yesterday.



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