Your analysis started with revenue and then determined stock price based on that. Stock prices are based on the present value of a future stream of earnings, not revenue. Do a deeper analysis of the company (down to net income and EPS) and see what you come up with.
1) Name a CEO that doesn't have a bias in the market in which they operate? Marketing is unbiased? 2) Some PDs mandate camera usage. Some police officers have been fired for not turning the cameras on while on duty. 3) Once funding is provided by the Fed and states (several states developing legislation now), the real business gets going (2016). 4) Not all officers need them (behind-the-desk types don't). But body cameras are also being used by building inspectors and parking meter attendants in Miami. 5) Mr. Smith is like Amazon's leader: grab market share while you can. If it generates losses in the short term, so be it. These cameras are sticky. Once installed, they are unlikely to be replaced with a competitive product until the contract ends. 6) TASR's AXON segment is running at a revenue rate of $25M annualized, based on 1Q15, and their cameras are only in 3,000 of 18,000 agencies worldwide that TASR has a relationship with. 7) Competitor DGLY is on the ropes financially, funding their operations by calling convertible debt and exercising stock options and warrants (they can't get funding elsewhere?). When selecting a product, PDs hopefully look at the financial viability of a supplier to see that they can provide the service through the contract period.
A TV newscast reported that the Sacramento PD has been analyzing body (and Flex) cameras for six months and may be analyzing them for up to a year more before making a decision that affects more than 700 officers. They tested TASR cameras previously and are now testing Vievu's camera. Stockton, CA PD (49 miles south of Sacramento) has been using TASR cameras for about a year. Folsom, CA PD (23 miles east of Sacramento) has been using cameras for eight years.
MF thinks TASR's purchase of MediaSolv is "a case of right time, right company." MediaSolve is a "highly complementary video solutions provider," fitting well with TASR's EVIDENCE unit. MediaSolv's Evidence Center is a one-stop digitized repository of video footage from multiple sources. MediaSolve produces and sells the hardware that supplies the footage. MediaSolv's current customers include Chicago, Philadelphia and Toronto police forces. A week after the acquisition, TASR announced an order for nearly 1,000 Axon cameras from the Louisville, KY PD with an upper tier of EVIDENCE service and MediaSolv's CCTV video and photo management solution. The acquisition is already bringing in new business. MF ends by saying "MediaSolve was a smart, well-timed and relatively inexpensive buy for the company that will almost certainly strengthen its business."
That's not a good business decision. There is lots of money for a national company to make in a city like Baltimore. Besides, CVS is big enough to be self-insured for losses like this or has insurance to pay for most, if not all, of the loss. Your suggestion would be an dangerous precedence. If people knew a company could be swayed that easily, what do you think people would do to, say, Wal-Mart's big blue box outlets if they didn't like them in their community? They have to be like Boston strong. Fortunately, you're not an executive that could destroy a company.
1) The body camera business is too new. That segment is losing money (more in 1Q15 than in 1Q14), so it hasn't proved it's worth to prospective buyers. 2) The cash cow is the taser segment, and that represents 86% of total 1Q15 revenue. It's not growing that fast (18% revenue growth YOY in 1Q15; basically a replacement business with new models) for a buyer to pay a premium over the current P/E multiple of around 70. 3) "Big players" look at deals north of $10B to have much impact on their total business. A "small" player would be looking at TASR, which has a market cap of only $2B. But all segments of the business need to be profitable before TASR is a serious contender for purchase.
Oops; TASR got an 80%.
They don't have to add up to 100%. It's a score, just like a grade in school. A tough test when the highest score is only 69%. Reminds me of my engineering physics professor (A's to 85, B's to 65, C's to 45 and D's to 30). Vievu wasn't on the list (not even considered)?!
ACLU endorses body cameras. One Penn. DA did not know that tasers can have cameras too. A video from one of them was used to arrest an officer for shooting someone in the back in January while they were on the ground (charged with criminal homicide).
For statewide RFPs involving tens of thousands of cameras, defense companies may be interested...all officers do not need a camera (e.g., administrative types)...to build a company, hire to your weakness.
LAPD chose Taser, after reviewing three cameras, because of its better video in low-light (night) conditions.
TASR's financials give revenue for product and quantity of product sold to obtain revenue per product. You would have to be their cost accountant to know the fixed and variable costs with further breakdown by product to know that information. Losses at the AXON unit are expanding. Hopefully they will turn around soon. Sacramento PD is testing at least two camera models. One officer prefers the Vievu (like the NYPD) because of its smaller footprint and easier use. Slide the middle portion of the Vievu camera down and its on; up, and it's off. With the AXON body camera, you have to press a button for certain amount of time to activate it or shut it off. And when Vievu video is downloaded to a PC, it cannot be edited.
You have a simplified view of government. The IT of one department of government may not be involved in any way with the IT unit of another department (for security reasons, as one example). In just one unit of government I am familiar with, there are 3,500 people, and 25% of them are IT people. That organization has about three dozen computer systems. They are trying to integrate most of them. The cost exceeds a half a billion dollars (and counting) over years. These things do not work seamlessly. In the case of body cameras, a city PD may be involved with the city DA, the State DA, or units of the Federal government (e.g., the FBI) for one case. Privacy is an issue as PDs are coming up with various policies to handle it based on laws in their state. State laws are different and not consistent. Some states are community property states and some are not. The same can be said for privacy issues.
Rialto, CA PD saved $420,000 from reduced civilian complaints and another $350,000 moving officers from internal affairs to more worthwhile endeavors because the cameras were so effective. That's a savings of $770,000. Divide that by the cost of the camera system ($90,000), and that's a benefit/cost ratio of 8.56:1. Let's stick with 8:1 to be conservative.
If it's like the Rialto, CA PD study conducted by Cambridge University, which had 59% and 88% reductions repectively, it's on a year-over-year basis, when cameras were not being used at all in the earlier period. Studies in Mesa, AZ and the UK have similar results: the benefits outweigh the costs by multiples (more than 8:1 in Rialto's case).