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Taser International (TASR) shares surged on Oct. 5 after the company received three orders totaling 2,654 Taser X26 units and accessories. With these orders, the Scottsdale (Ariz.) maker of stun guns expects third-quarter revenue of about $18 million.
Taser said in a press release that the San Bernardino County (Calif.) Sheriff's Office ordered 1,111 units, the Mesa Police Dept. ordered 543 units, and the French Ministry of Interior ordered 1,000 units of the X26 stun gun.
Merriman Curhan reiterated its buy recommendation on the stock on the news. Analyst Eric Wold says he expects to raise his $16.4 million third-quarter revenue estimate to about $18 million, the same as Taser's new third-quarter forecast, and will review his fourth-quarter and 2007 estimates for potential increases. Wold sees earnings per share of 10 cents for 2006 and 25 cents for 2007.
With continued acceleration in quarterly orders, the start of shipments to France, and potential for fourth-quarter revenues to be above current estimates, Wold says he would recommend aggressively buying Taser shares at current levels.
Taser shares shot up nearly 12% to settle at $8.54 on Oct. 5. Still, this once high-flyer is well off its all-time high of $31.65 hit at the end of 2004 amid media reports of death and injury caused by its guns, which deliver an electric shock that causes a person's muscles to lock up (see BusinessWeek.com, 9/28/05, "Taser's Shocking Slide").
The stock's big slide came in mid-January 2005 after the Securities and Exchange Commission launched an inquiry into statements by Taser executives regarding the safety of the devices. The probe was eventually dropped and no charges were filed, according to news reports.
In August, Taser said it would pay nearly $22 million to settle several lawsuits, including a shareholder class-action case, claiming executives played down the risks of its weapons to artificially boost the share price. The company's earnings have also been hurt by the legal costs.
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