Friday, June 22, 2007

Taser (NASDAQ:TASR): Jeffco upping tgt to $20 from $13

- Jefferies is out with a call on Taser (NASDAQ:TASR) upping their tgt to $20 from $13. According to the firm the co has announced orders for approximately 7,500 Taser X26 units, which when combined with initial cartridge sales and accesories should bring in about $7.5 million. Last quarter, the company did not announce any significant orders and was able to ship close to 12,000 X26 units and record total revenue of $15 million. Assuming the volume of underlying smaller order sizes for Tasers has been healthy, they believe the company has received enough orders to at least meet firm's high-end revenue estimate of $22 million. They also see couple of cents of upside to their $0.04 EPS est.

Inflection Point? Jeffco believes "yes" and is increasing '08 EPS by a penny accordingly. Over 44 countries have started a Taser program, and there are countries like France that may aggressively roll out Tasers to their officers. The penetration rate of the U.S. law enforcement market is about 25%, and there are large cities like Chicago that are warming to the product.

The question to which they do not have an answer is whether the business acceleration looks like a hockey stick (steep acceleration), a slow building exponential graph (flatter acceleration), or more of an upward moving sine wave (lumpy). Bottom line is the business is improving, and many future catalysts exist.

Notablecalls: TASR has been on fire over the past couple of months and I suspect Jeffco's call will yield some nice upside today and over the next couple of weeks.

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