The shares of TASER (TASR) are on the rise after research firm Imperial Capital initiated coverage of the stock with an Outperform rating. Imperial's initiation comes shortly after the company lost a New York City police body camera contract to a competitor.

INITIATION: Noting that TASER is the market leader in the electrical weapon space, Imperial Capital analyst Jeff Kessler wrote that the company's "unaided brand awareness, very high market share and its business model" give it a significant competitive advantage. Moreover, unlike its competitors, TASER has a cloud-enabled forensic solution that it offers in tandem with its hardware, and "a long-term relationship with law enforcement agencies," Kessler stated. Additionally, the company's weapons carry margins of about 70%, and demand is growing for non-lethal and self-defense weapons amid the rising crime rate, the analyst wrote. Finally, TASER's investments in R&D and M&A could enable it to improve its weapons and body camera offerings going forward, wrote Kessler, who set a $27 price target on the shares. NYPD

CONTRACT: TASER bid unsuccessfully for a New York City Police Department body camera contract, losing out earlier this month to a small, privately held competitor, Vievu. The latter company bid only $20 per camera per month, which is far below TASER's usual price of around $45-$49 per camera per month. TASER lodged a formal complaint about the NYPD's decision ,and raised concerns about Vievu's pricing and technology, according to the Wall Street Journal. Last night, TASER confirmed that on October 3, due to its concern that the NYPD "was about to select a body worn camera vendor without a technical field evaluation," TASER offered to provide the NYPD with 1,000 TASER Axon body cameras, software and storage, free of charge. At a public hearing held by the NYPD concerning the proposed contract, Vievu said it would match TASER's gift, the company added. Commenting on the development, TASER government affairs VP Isaiah Fields said, "We're thrilled that TASER is the catalyst for NYPD's opportunity to get 2,000 free body cameras at no cost to the community. The NYPD can use this opportunity to accelerate its body camera program with cameras out on the streets this year instead of next, in a side-by-side field trial that ensures the selection of the best technology for the city."

LAWSUIT: A federal district court ruled today that another TASER rival in the body camera space, Digital Ally (DGLY), can commence discovery pertaining to its antitrust lawsuit against TASER. The ruling removed a stay on the discovery that had been in place.

PRICE ACTION: In morning trading, TASER climbed 4% to $23. Small-cap Digital Ally jumped 9.8%, or 53c, to $5.94 in the wake of its announcement of the court ruling.