Monday, December 1, 2014

* TASER (TASR) - This is What Explosive Growth and Efficiency Looks Like (5 Charts)

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TASR closed trading at $27.09, up 2.8% with IV30™ up 7.5%. The Symbol Summary is included below.

Provided by Livevol

TASR stock is up 170% over the last two-years as total revenue, revenue per employee, gross margin % and net income have grown, even as investment in research & development has increased.

Relative to its peers, TASR's net income two-year growth is the largest (by far).  Let's examine the financial measures in the recent past and then look at near-term risk pricing by the option market.

Net Income, 2-Year CAGR % vs Total Revenue, 2-Year CAGR %
When plotting the two-year rowing earnings on the y-axis, and revenue on the x-axis, we can see how quickly TASR is growing it's net income relative to peers.

Provided by Capital Market Laboratories

The two year stock return chart, is included below.
Provided by Livevol

The stock is up ~170% in the last two-years and ~35% in the last year.  Let's turn back to the visualizations.

Revenue (TTM)
Check out that trend in revenue growth since 2011 -- it's abrupt and consistent, with the firm nearly doubling sales.

Provided by Capital Market Laboratories

Revenue per Employee
This is a fascinating trend since 2011; not only has revenue doubled, but in that same time period, revenue per employee has increased ~40%.  That's quite a trick -- growth fast and improve efficiency at the same time.

Provided by Capital Market Laboratories

Revenue (TTM) vs. Gross Margin %
Again, since 2011, not only has revenue doubled, but incredibly, gross margin % has also risen by nearly 30%.  This is another easy visual with the same conclusion: TASR is growing and in that growth is also turning greater efficiencies.

Provided by Capital Market Laboratories

Revenue (TTM) vs. Net Income (TTM)
If we look from 2012 forward, we can see that the revenue explosion, along with improving gross margin % and greater revenue per employee has had the tautological result: earnings are booming and have hit all-time highs.  One thong to note -- earnings are still a very small number (~$20M), don't lose the forest for the trees.

Provided by Capital Market Laboratories

Revenue (TTM) vs. Research & Development (TTM)
This is the last visual, but one of my favorites.  We can see that as R&D spending has increased over the last two-years, net income (earnings) has continued to increase.  TASR does not appear to be suffocating the business in the short-term for profits at the expense of later product development.

Provided by Capital Market Laboratories

Finally, the Options Tab is included below.

Provided by Livevol

Using the at-the-money (ATM) straddle we can see that the option market reflects a price range of [$20, $24]

  • If you believe the stock will be outside that range on expiry or any date before then, then you think the volatility is too low.
  • If you believe that range is too wide, and that the stock will definitively be in that range on expiration, then you think volatility is too high.
  • If you're not sure, and can make an argument for either case, then you think volatility is priced just about right.

This is trade analysis, not a recommendation.

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