On Monday, Taser International (NASDAQ:TASR) got a lift when management raised earnings guidance and said 2004 revenue growth will be 150%. Let's get the obvious out of the way first: The stock is expensive. It trades at 21 times sales and 18 times book value, and is wildly volatile with a beta of 3.6. Further, there's no dividend and no visibility for one

Over the last few weeks, though, there's been a change in the trading of Taser's stock. The volatility has declined noticeably. Perhaps some of the mania surrounding the stock is starting to wear off. If that's correct, I believe it might start to get a little easier to understand what the company is all about.

In the last two years or so, the entire security industry has undergone a technological evolution. At least, that's how it appears to a layperson. The catalyst for this is obvious: the terror threat to the U.S. We have seen all sorts of micro-cap stocks that make such things as special cameras (like IPIX (NASDAQ:IPIX)) or scanning devices skyrocket. Some detractors have called it a bubble.

The perception of the stock being too expensive doesn't alter the fact that demand for the firm's stun guns is rapidly increasing. Up to this point, the customers have all been police or military. I believe there will be growth and demand from private-sector security and even individuals in the future. An onboard marshal will not blast a hole through the wall of a plane with a stun gun, for example.

I think the group of security stocks has relevance in today's market. Despite the history of volatility and very high valuations, Taser may continue to perform well. It seems that security will only gain importance in the next few years. For now, it's likely that the company will play a big role in the continued evolution of the security industry.

Want to read more about companies benefiting from the country's increased focus on security? Check out:

Fool contributor Roger Nusbaum is an investment manager and wildland firefighter in Prescott, Ariz. At press time, neither he nor his clients owned any of the stocks mentioned.