Taser Has Untapped Potential

Who says crime doesn't pay? Taser International hopes that it not only pays handsomely but also remains a growth industry. Well, maybe not crime, exactly, but crime-fighting.

Taser produces electronic control devices -- stun guns, in the vernacular -- used by the police and corrections officers, the military and even by crime-wary citizens. Tasers temporarily disable threatening or dangerous individuals or those resisting arrest, including one unruly college student who disrupted a political speech, as seen in the notorious video that made "Don't tase me, Bro!" a catchphrase of 2007.

As much as perps on the mean streets may hate the company's devices, you may love the company's shares. Wall Street analysts certainly do: Most are telling clients to buy the stock (symbol TASR), which at $11 is two-thirds off its late-2004 high. Analysts see earnings jumping roughly 50 percent this year and next as Taser penetrates largely untapped markets here and abroad, with essentially no competition.

The Scottsdale, Ariz., company has sold more than 400,000 devices to some 12,000 agencies, primarily U.S. law-enforcement and corrections officers. That's only 25 to 30 percent of the domestic market and less than 5 percent of the worldwide market. Taser has barely tapped the private-security, military and consumer markets.

Overseas business, which accounted for about 15 percent of 2007 sales, should take on a bigger role this year. So should sales to ordinary Joes and Janes. Taser's C2 model (about $350) began shipping in the third quarter, some in leopard print or fashion pink.

Despite Taser's potential, you need to have a strong stomach to own the stock. The devices are clearly controversial, and their use is restricted in some states.