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Digital Ally (DGLY)
NASDAQ:DGLY
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Digital Ally
(NASDAQ:DGLY)
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Rating:39Underperform
Price Target:
$0.78
▼(-5.24% Downside)
Digital Ally's stock score is primarily impacted by its poor financial performance and bearish technical indicators. The company's ongoing financial struggles, including negative profitability and cash flow issues, are significant concerns. While recent corporate events show some positive developments, they are not enough to offset the overall negative outlook.
Positive Factors
Revenue Growth
The revenue growth indicates successful product adoption and market penetration, enhancing the company's competitive position in the law enforcement technology sector.
Cost Reduction Strategies
Effective cost management improves profitability and operational efficiency, providing a more sustainable financial foundation for future growth.
Improved Liquidity
Enhanced liquidity ensures financial flexibility and compliance with Nasdaq requirements, supporting long-term operational stability and growth initiatives.
Negative Factors
Negative Profitability
Ongoing losses and cash flow issues indicate challenges in achieving sustainable profitability, which could hinder long-term financial health and growth potential.
Decline in Revenue
A historical decline in revenue suggests challenges in market demand or competitive positioning, potentially impacting future growth prospects.
Negative Cash Flow
Negative cash flow indicates inefficiencies in operations and may limit the company's ability to invest in growth opportunities or weather economic downturns.
Digital Ally (DGLY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.38M
Dividend YieldN/A
Average Volume (3M)47.86K
Price to Earnings (P/E)―
Beta (1Y)1.71
Revenue Growth-9.62%
EPS Growth95.79%
CountryUS
Employees31
SectorCommunication Services
Sector Strength97
IndustrySecurity & Protection Services
Share Statistics
EPS (TTM)-0.59
Shares Outstanding1,898,436
10 Day Avg. Volume99,163
30 Day Avg. Volume47,863
Financial Highlights & Ratios
PEG Ratio4.77
Price to Book (P/B)-477.68
Price to Sales (P/S)189.97
P/FCF Ratio-707.09
Enterprise Value/Market Cap4.00
Enterprise Value/Revenue0.30
Enterprise Value/Gross Profit1.17
Enterprise Value/Ebitda-0.67
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Digital Ally Business Overview & Revenue Model
Company DescriptionDigital Ally, Inc. (DGLY) is a technology company specializing in the development and manufacturing of digital video recording equipment and software solutions primarily for law enforcement and public safety agencies. The company offers a range of products, including body-worn cameras, in-car video systems, and evidence management software, aimed at enhancing accountability, transparency, and operational efficiency within the public safety sector. Digital Ally operates in the law enforcement technology sector and serves a growing market focused on providing innovative solutions for crime prevention and investigation.
How the Company Makes MoneyDigital Ally generates revenue through the sale of its hardware products, including body-worn cameras and in-car video systems, which are often sold to law enforcement agencies. Additionally, the company offers subscription-based services for data storage and management through its software solutions, creating a recurring revenue stream. Key partnerships with law enforcement agencies and government contracts are significant contributors to its earnings, allowing the company to secure long-term sales and service agreements. Furthermore, Digital Ally may benefit from ongoing maintenance and support contracts related to its products, enhancing its overall revenue potential.
Digital Ally Earnings Call Summary
Earnings Call Date:May 21, 2025
(Q1-2025)
| % Change Since: |
Next Earnings Date:May 27, 2026
Earnings Call Sentiment Positive
The earnings call reflected a positive sentiment overall. Despite the decline in revenue and the necessity of reverse stock splits, the company demonstrated significant improvements in gross margin, SG&A expenses, net income, and liquidity. The progress towards NASDAQ compliance and planned future initiatives in both the video solutions and entertainment segments further bolster confidence.Q1-2025 Updates
Positive Updates
Significant Improvement in Gross Margin
The overall gross margin percentage improved to 36% from 28% last year, marking a positive trend in profitability despite a drop in revenue.
Substantial Reduction in SG&A Expenses
SG&A expenses were reduced by $2.6 million, a 72% improvement year-over-year, due to strategic cost-cutting measures including headcount reduction and facility downsizing.
Strong Net Income Turnaround
Net income for Q1 2025 was $4.2 million, or $1.41 per share, compared to a $3.9 million loss in 2024, representing an $8 million positive swing.
Enhanced Balance Sheet and Liquidity
The company's cash position improved from $400,000 to $3.8 million in the first quarter, and working capital is now positive at $3.4 million, reflecting a $23 million improvement.
Progress in NASDAQ Compliance
The company has largely resolved NASDAQ compliance issues, improving equity to $11.6 million and addressing the minimum bid price requirement through reverse splits.
Negative Updates
Decline in Year-Over-Year Revenue
Revenues were down by over $1 million or 19%, primarily due to a decrease in video product sales, though a backlog of $2 million indicates potential future recovery.
Painful Reverse Stock Splits
The company executed two reverse splits (1-for-20 and 1-for-100) to maintain NASDAQ listing compliance, which significantly impacted shareholder equity.
Company Guidance
During the Digital Ally First Quarter Earnings and Corporate Update Conference Call, significant guidance was provided concerning the company's financial performance and strategic direction. The company reported a 19% decline in year-over-year revenues for the first quarter of 2025, largely due to video product sales being down, although they had a substantial backlog of over $2 million, which they plan to fulfill in upcoming quarters. Despite the revenue drop, the gross margin dollars improved by $78,000, or 5%, with the overall gross margin percentage increasing to 36% from 28% last year. This was attributed to refocusing efforts in the Entertainment segment and cutting down on non-economical sponsorships. SG&A expenses saw a remarkable decrease of $2.6 million, or 72%, year-over-year, with improvements in head count, facilities expenses, and general overhead. The company achieved a net income of $4.2 million in the first quarter of 2025, a turnaround from a $3.9 million loss in the same period in 2024, resulting in a total net improvement of over $8 million. Additionally, the balance sheet was strengthened by a $14 million public offering in February 2025, which improved working capital to $3.4 million from a deficit of $19.4 million at the end of 2024. Digital Ally's equity improved by over $20 million, and they are now in a strong liquidity position to support their operational plans for 2025 and beyond. The company also addressed compliance issues with NASDAQ, implementing reverse stock splits to meet the $1 minimum bid price requirement and maintain their listing. Looking ahead, Digital Ally is optimistic about their video solutions and custom entertainment segments, with plans for new product announcements and an expansion of their event production group, Kustom 440.Digital Ally Financial Statement Overview
Summary
Digital Ally faces substantial financial challenges across all verticals. Despite some improvements in gross profit margin and free cash flow growth, the company struggles with profitability, leverage, and cash flow generation. The negative net income and cash flow trends suggest a need for strategic adjustments to achieve financial stability and growth.Income Statement
Digital Ally's income statement reveals significant challenges. The company has experienced a decline in revenue over the years, with a slight recovery in the TTM period. Margins are concerning, with negative net profit and EBIT margins indicating ongoing losses. The gross profit margin has improved in the TTM period, but overall profitability remains weak.35
Negative
Balance Sheet
The balance sheet shows a mixed picture. The debt-to-equity ratio is relatively low in the TTM period, suggesting manageable leverage. However, the negative return on equity indicates that the company is not generating sufficient returns on shareholders' investments. The equity ratio has decreased, reflecting a potential risk in financial stability.40
Negative
Cash Flow
Cash flow analysis highlights significant issues. The company has consistently reported negative operating and free cash flows, indicating cash burn. Although there is a slight improvement in free cash flow growth in the TTM period, the operating cash flow to net income ratio remains negative, pointing to inefficiencies in converting income into cash.30
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 18.61M | 19.65M | 28.25M | 37.01M | 21.41M | 10.51M |
| Gross Profit | 4.69M | 5.49M | 5.76M | 2.32M | 5.66M | 4.06M |
| EBITDA | -8.21M | -15.88M | -20.11M | -16.66M | 26.38M | -2.00M |
| Net Income | -11.11M | -19.84M | -25.69M | -19.28M | 25.47M | -2.63M |
Balance Sheet | ||||||
| Total Assets | 25.96M | 27.74M | 47.03M | 56.67M | 82.99M | 20.80M |
| Cash, Cash Equivalents and Short-Term Investments | 622.82K | 454.31K | 680.55K | 3.53M | 32.01M | 4.36M |
| Total Debt | 3.78M | 8.66M | 9.92M | 1.78M | 2.18M | 996.76K |
| Total Liabilities | 17.81M | 36.75M | 35.58M | 20.33M | 27.13M | 6.44M |
| Stockholders Equity | 9.29M | -7.82M | 10.78M | 35.89M | 55.81M | 14.36M |
Cash Flow | ||||||
| Free Cash Flow | -10.74M | -5.28M | -10.13M | -20.77M | -25.44M | -13.97M |
| Operating Cash Flow | -10.35M | -5.11M | -9.89M | -18.58M | -17.83M | -13.27M |
| Investing Cash Flow | 38.00K | 387.55K | -240.71K | -2.94M | -19.12M | -1.50M |
| Financing Cash Flow | 10.32M | 4.40M | 7.38M | -6.95M | 64.60M | 18.78M |
Digital Ally Technical Analysis
Negative
0.82
Price Trends
1.49
Negative
1.70
Negative
19.75
Negative
Market Momentum
-0.17
Positive
24.74
Positive
3.07
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DGLY, the sentiment is Negative. The current price of 0.82 is below the 20-day moving average (MA) of 1.21, below the 50-day MA of 1.49, and below the 200-day MA of 19.75, indicating a bearish trend. The MACD of -0.17 indicates Positive momentum. The RSI at 24.74 is Positive, neither overbought nor oversold. The STOCH value of 3.07 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DGLY.
Digital Ally Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
54 Neutral | $43.77M | 28.13 | ― | ― | ― | ― | |
50 Neutral | $8.51M | -1.79 | -44.14% | ― | -14.21% | -20.44% | |
47 Neutral | $6.96M | -0.63 | -143.60% | ― | -1.19% | 86.72% | |
47 Neutral | $16.78M | -1.76 | -21.54% | ― | 4.38% | 74.69% | |
39 Underperform | $1.38M | >-0.01 | -233.66% | ― | -9.62% | 95.79% |
* Communication Services Sector Average
DGLY
Digital Ally
0.72
-959.28
-99.92%
SPCB
SuperCom
9.84
6.45
190.27%
BKYI
BIO-key International
0.64
-0.23
-26.44%
IVDA
Iveda Solutions
0.96
-1.99
-67.46%
VRME
VerifyMe
0.68
0.05
7.94%
GFAI
Guardforce AI Co
0.80
-0.29
-26.61%
Digital Ally Corporate Events
Private Placements and FinancingBusiness Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance
Digital Ally Reports Strong Q3 2025 Financial Results
Positive
Nov 12, 2025
Digital Ally, Inc. announced improved financial results for the third quarter of 2025, with a 12% increase in revenue to $4.5 million and a significant reduction in SG&A expenses by 72.7%. The company reported an operating loss improvement of 84.8% compared to the previous year, alongside a notable enhancement in stockholders’ equity and working capital. These results reflect the company’s successful cost reduction strategies and restructuring efforts, particularly in its law enforcement product sales organization, despite challenging economic conditions affecting its primary customer base. Additionally, a $14.3 million public equity offering earlier in 2025 bolstered the company’s liquidity, ensuring compliance with Nasdaq listing requirements.
Private Placements and FinancingBusiness Operations and Strategy
Digital Ally Amends Stock Purchase Agreement
Neutral
Nov 7, 2025
On November 7, 2025, Digital Ally, Inc. amended a Common Stock Purchase Agreement with an investor, initially dated September 15, 2025. This amendment involves a commitment fee paid in shares and cash, impacting stockholder equity and future financing strategies.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.