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What: Shares of law enforcement equipment maker TASER International, Inc. (NASDAQ:AAXN) fell as much as 16% today after reporting disappointing earnings.
So what: Fourth-quarter revenue was up 17% from a year ago to $46.8 million, driven by the TASER X26P smart weapon and cartridges. Net income fell slightly from $5.4 million a year ago to $5.1 million, or $0.09 per share.
Earnings per share missed expectations by $0.02 but revenue easily surpassed Wall Street's estimate of $42.4 million. Management is investing heavily in growth and that's showing results, but it's been costly to the bottom line.
Now what: The bottom-line miss may be the market's focus today but I really think the revenue growth and potential momentum into 2015 should be where investors are looking. TASER's EVIDENCE.com and AXON bookings were quadruple what they were a year ago, at $24.6 million, and 28 major cities are in active discussions to add EVIDENCE.com and body cameras to their police forces, compared to the 13 that deploy them today. That's tremendous momentum for the business, and I'd happily give up a penny or two in earnings per share for higher growth long-term. I see no reason to think this is anything other than a buying opportunity today.
Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.