Nothing fills my email box faster than saying anything good about weapons manufacturer Taser
Taser reported today that its third-quarter revenue increased 211% and net income grew 469% over the comparable quarter last year. The news sent the stock up 10%.
The skeptics will note that sales are slowing -- from up roughly 290% in the first two quarters. They will also chuckle that four-digit percentage gains in net income have passed, too. But even they have to admit that the stock is trading at less than 50 times 2005 analyst estimates. That's hardly an extraordinary multiple given the sales and earnings momentum.
Taser's cash has increased by $25.6 million since the end of 2003. More importantly, the company continues to build evidence to blunt charges by Viacom's
The debt-free company is also making sales progress on multiple fronts. While Dow Jones
Taser is hardly a one-trick pony. The company is working with General Dynamics
Don't forget, too, that over time, cartridges (the Taser equivalent to ammunition) will provide a stream of income the way high-margin razor blades do for Gillette
Taser is an extremely expensive stock because the expectations are extremely high. While rapid growth will continue, the stock's meteoric rise (it's up 400% over the last 52 weeks) may not. Like Amgen
Also supporting this stock's price is the lack of competition. The company's high margins will certainly attract attention. When they do, expect margins to contract. But, until then, expect more stellar earnings reports.
For related Fool articles, see:
Dell Computer is a Motley Fool Stock Advisor recommendation. Want to learn more? Subscribe today risk-free for six months.
Fool contributor W.D. Crotty does not own stock in any of the companies mentioned.