2017 Should Be Better For Taser Shareholders, Oppenheimer's Uerkwitz Says

Oppenheimer's Andrew Uerkwitz maintained a Perform rating for TASER International, Inc. TASR, saying that the company’s quarterly results had “many moving pieces with something for everyone.”

Taser reported its 4Q15 results significantly ahead of the consensus expectations. Analyst Andrew Uerkwitz pointed out, however, that the beat was due to weapons, and not video. The company’s total revenues came in at $56.0M, versus Street's estimate of $50.5M and up 11 percent q/q and 20 percent y/y.

Growth was driven mainly by record weapon sales, which grew 18 percent y/y and 15 percent q/q. Adj. EBITDA was reported at $11.7M, versus the Street's $6.7M. Bookings stood at $44.7M, representing a 21 percent sequential increase.

“International sales grew nicely for the quarter, but lagged a bit for the year. Gross margins perked up (better mix toward weapons) but operating margins are down for the year,” Uerkwitz wrote.

Management guided to single-digit weapons growth for 2016. Taser expects to witness gross margin pressure. The company projected Opex at $123-$128M, and bookings growing faster than Opex.

The EPS estimate for 2016 has been reduced from $0.34 to $0.22 to reflect stronger top-line growth being offset by continued elevated Opex investments. “We don't see a bottom in operating losses until the back half of 2016…[W]e believe TASR will be able to leverage OPEX in '17,” Uerkwitz added.