Sidoti & Co: Buy Taser After Sharp Pullback

• The share price of TASER International, Inc. TASR has declined 28.63 percent over the past three month.
• Allen Klee of Sidoti & Co has initiated coverage of the company with a Buy rating and price target of $35.
• The significant selloff in the stock, following the 2Q15 earnings, presents an attractive entry point, according to Klee.

Analyst Allen Klee attributes the decline in the share price to the management comments regarding “plans to increase spending to better penetrate the camera/video market.” Klee believes that this is the right strategy, given the size of the market, which consists of about 800,000 officers in the US.

According to the Sidoti report, TASER has sold approximately 50,000 cameras to date, and “is keenly focused on gaining share with a first mover advantage.” However, with these sales being subscription based, the revenue recognition has been slower than had originally been expected by some investors.

On the other hand, “the company has not lost a major city in the last 24 months and benefits from bundling offerings with weapons and storage solutions,” Klee stated, while mentioning that investors might be underappreciating the size of TASER’s international market, which could prove to be larger than that in the US in the longer term.