Market Overview

Taser Could Be In-Class Leader Following Lethal Shooting In Ferguson

Taser Could Be In-Class Leader Following Lethal Shooting In Ferguson

After Time reported that a California mayor is urging its police officers to use body-worn cameras following the fatal shooting of a teenager in Ferguson, Missouri, shares of micro-cap Digital Ally (NASDAQ: DGLY) nearly doubled in value.

More And More Cops To Wear Cameras?

Digital Ally launched a camera in December that could be used by police officers.

Along with Digital Ally, shares of Taser International (NASDAQ: TASR) rose on the events in Ferguson, Missouri. Taser manufactures video cameras specifically for law enforcement use, while Digital Ally has struggled to transition from in-car cameras to body mounted devices.

Related Link: How U.S. Law Enforcement Snaps Up Military Gear

Investors are likely speculating that the fatal shooting will spur wide adoption of video camera use by officers in addition to non-lethal weapons.

Early Stages Of Adoption

On-officer video camera use is still in an early stage of adoption as only a handful of police departments use wearable cameras. Reasons cited for a low adoption rate include high costs and limited evidence that use of a video camera results in a lower rate of police misconduct.

The cost of the camera alone ranges from $800 to $1,000 and this does not include varied costs for the police departments to store the data. Additionally, many municipalities may not have the technical know-how to operate and manage video cameras.

Momentum may accelerate over the coming months as police forces across the U.S. began to debunk some of the arguments against video cameras.

Time also reported that the Rialto Police Department in California saw an 88 percent decline in complaints filed against its officers after the first 12 months officers wore body cameras in the field.

Analyst Reaction

Paul Coster of JPMorgan has an Overweight rating on Taser and stated in a note to clients on August 19 that “Taser is well positioned to be a market leader” in body-worn video cameras.

Coster adds that there is further upside in shares of Taser, which will be supported by an acceleration in the video camera segment. Also, the analyst notes there could be a domestic upgrade and first-time adoption internationally to Taser's non-lethal weapons segment.


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