"Less lethal" weapons maker Taser International (NASDAQ:TASR) continued its remarkable run today, with its shares up more than 16% in morning trading on news of strong third-quarter financial performance. The jump, impressive in the context of a morning, seems insignificant given that the company's shares have risen more quickly than Frink on Flubber -- clocking in gains well over 1,000% -- over the last 12 months.

We took a quick look at Taser earlier this month when the company's shares (surprise, surprise) jumped following news that Congress had allocated money to the Defense Department to buy its weapons. That news has yet to turn into revenue for Taser, but it represents as strong a sign as any that it has made headway in its efforts to add the yet-untapped military to its law enforcement-heavy customer base. (One news report said Taser will begin shipping product to the Army in Q4.)

But let's get back to today's news. The company appears to be doing just about all the things you could ask from a small company: growing sales, profits and margins, adding new customers, improving its cash position, and boosting near-term projections. And even as the company looks to growth in new markets, its core law enforcement business continues to provide nice boosts in sales -- with overseas business seen as presenting further opportunity down the line.

The question today becomes: Should investors still be buying into this stock at current levels? At about $51 per share (or a market cap of approximately $145 million), investors are currently paying some 50 times projected 2003 net income for a company that's only now showing signs that it is ready to deliver some free cash flow.

But the company, lightly covered on Wall Street, is blowing away what passes for the market's earnings projections. (No full-year 2003 EPS estimate I could find came close to the dollar per share the company expects to deliver this calendar year.) Considering the kind of growth it is demonstrating, Taser doesn't look nearly as richly valued as it might first appear.

There's a flip side to this story, however. Given the relative lack of media and Wall Street coverage - as well as the apparent ineptitude of those analysts who are covering the company, the reasons for which are unclear - it seems that investors following this stock are largely on their own. With small companies especially, this presents both an opportunity and a challenge.

For more discussion of small companies with growth potential, check out our Motley Fool Hidden Gems, where Tom Gardner scours the small-cap market for companies on the way up.

Dave Marino-Nachison can be reached at dmarnach@fool.com.