The onus for reducing the risk of violent confrontations between the police and the public has been placed on the law enforcement community, and they've responded with increased training and the use of less than lethal weapons, deploying everything from batons to bean-bag rounds.

Yet there's probably been no greater advance than the use of TASER International's (NASDAQ: TASR) smart, electrical weapons, colloquially better known simply as Tasers. They have dramatically reduced the risk of injury to the officer and the suspect. But TASER itself has grown to encompass much more than just stun guns, and now includes everything from body cameras to evidence-management tools, all with the goal of preserving safety and the facts.

But that doesn't necessarily mean an investment in TASER International is a good idea, though maybe it really does. Here are both sides of the debate.

Image source: Flickr via Marcelo Freixo.

Buying TASER is on target 

Rich Duprey: Stun guns, body cameras, evidence management software, and now drones. TASER International is outfitting the police department of tomorrow with the tools necessary for a less than lethal posture, and it bodes well for future growth.

TASER, of course, is synonymous with the stun gun market. Since 1994, more than 850,000 conducted electrical weapons have been sold to more than 18,000 law enforcement agencies across the country, and the devices are deployed at the rate of over 900 times per day, or once every two minutes. While there have been incidents where a Taser has been used improperly, overwhelmingly the less-than-lethal weapon has meant greater safety for the officer using it as well as the actor it's subdued.

Image source: Taser International.

Yet the demand for additional resources be made available led to calls for deployment of camera systems, both in-car and body-mounted. Although the market is dominated by smaller outfits like WatchGuard Video, Safariland's Vievu, and Digital Ally, TASER's Axon cameras have proved to be just as popular among police agencies, as more than 3,500 departments in the U.S. have purchased its systems.

Having worked in a department with older technology dash-mounted camera systems, I can attest to the monumental challenge presented by video and audio evidence management. In today's digital world, careful curating of the data is essential and there TASER has taken a leadership role as well with its subscription-based Evidence.com suite of management tools.

Together they provided almost $200 million in annual sales last year, up 20% from the year before, with TASER weapons accounting for 82% of the total and the body cams and evidence management systems the rest. Over the first six months of 2016, Axon division sales accounted for 20% of the total and with more contracts being won, it's likely to assume a larger percentage in the future. It's even exploring the use of drones equipped with stun guns as a means of neutralizing high-risk scenarios.  

While there are certainly challenges to face, both from competitors and from vested communities when its devices are misused or malfunction, it won't be shocking to think TASER International still has plenty of room to grow revenues, profits, and opportunity.

Buying TASER Is A Mistake

Rich Smith: I agree. TASER's entry into the market for police body cameras -- indeed, you could almost say its creation of this market -- was an absolute plus for the stock. It created a new marketplace where TASER can grow. But before getting too excited about that fact, it's worth considering why TASER needed to create such a market in the first place. 

Image source: Taser International.

Simply put, TASER is running out of room to grow in the market for Tasers. TASER's marketing materials show that it's sold Taser stun guns to 97.5% of the law enforcement agencies in America already. 850,000 Tasers sold, divided among 929,000 active local, state, and federal law enforcement officers, suggests that as many as 91.5% of police may already be carrying a TASER. So who's left to sell to? That's sort of a rhetorical question. After all, last quarter TASER reported 34% sales growth within its TASER division, so there do appear to be at least some police still needing new Tasers -- if only to upgrade and replace older models.

But even so, when you consider that Axon body camera sales were up 74.5% last quarter, and apparently selling more than twice as fast as Taser stun guns, it's clear that the market for stun guns is filling up a lot faster than the market for body cameras. And given that TASER earns much fatter gross profit margins on TASER sales (70%) than on Axon sales (42%), that's not great news for TASER stock. 

Long story short: While TASER had a terrific quarter last week, the good news seems already priced into the stock at its current valuation of 94 times earnings. The bad news -- the slowing sales market for stun guns, and the increasing dependence on lower margin body camera sales -- is not priced in. 

And that's why I think buying TASER stock at these high prices may be a mistake.

Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Taser International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.