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Digital Ally (DGLY)
:DGLY
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Digital Ally
(NASDAQ:DGLY)
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Rating:41Neutral
Price Target:
$2.00
▼(-4.76% Downside)
Digital Ally's overall stock score is primarily impacted by its weak financial performance, characterized by ongoing losses and cash flow issues. Technical analysis provides a slightly more positive outlook with short-term bullish momentum, but the valuation remains unattractive due to the lack of earnings and dividends. The absence of earnings call insights and corporate events limits additional context.
Digital Ally (DGLY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.85M
Dividend YieldN/A
Average Volume (3M)173.03K
Price to Earnings (P/E)―
Beta (1Y)1.58
Revenue Growth-20.52%
EPS Growth83.27%
CountryUS
Employees31
SectorCommunication Services
Sector Strength97
IndustrySecurity & Protection Services
Share Statistics
EPS (TTM)-4.43
Shares Outstanding1,727,421
10 Day Avg. Volume162,480
30 Day Avg. Volume173,026
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.16
Enterprise Value/Revenue0.24
Enterprise Value/Gross Profit0.95
Enterprise Value/Ebitda-0.31
Forecast
1Y Price Target
$3.00Price Target Upside42.86% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Digital Ally Business Overview & Revenue Model
Company DescriptionDigital Ally, Inc. produces and sells digital video imaging, storage, and disinfectant and related safety products for use in law enforcement, security, and commercial applications in the United States and internationally. It operates through Video Solutions, Revenue Cycle Management, and Ticketing segments. The company offers in-car digital video mirror systems for law enforcement; in-car digital video event recorder systems for commercial fleets; a suite of data management web-based tools to assist fleet managers in the organization, archival, and management of videos and telematics information; miniature body-worn digital video systems for law enforcement and private security; and VuLink, an in-car device that enables an in-car digital audio/video system and a body worn digital audio/video camera system to automatically and simultaneously start recording. It also provides VuVault and EVO Web, a cloud-based evidence management system; FleetVU Manager, a web-based software for commercial fleet tracking and monitoring; ThermoVu, a non-contact temperature-screening instrument that measures temperature through the wrist and controls entry to facilities when temperature measurements exceed pre-determined parameters; and Shield disinfectants and cleansers, as well as other personal protective equipment and supplies, such as masks, gloves, sanitizer wipes, and electrostatic sprayer to health care workers and other consumers. In addition, the company offers working capital and back-office services, including insurance and benefit verification, medical treatment documentation and coding, and collections to healthcare organizations; and operates TicketSmarter.com, an online ticketing marketplace for ticket sales, partnerships, and ticket resale services for live events, including concerts, sporting events, theatres, and performing arts. Digital Ally, Inc. was founded in 2004 and is headquartered in Lenexa, Kansas.
How the Company Makes MoneyDigital Ally generates revenue through several key streams, including the sale of its hardware products such as body cameras and in-car video systems, as well as subscriptions for its cloud-based video management software. The company also earns money through maintenance and support services for its products. Strategic partnerships with law enforcement agencies and government contracts play a significant role in driving sales, as these entities increasingly adopt technology solutions for transparency and evidence management. Additionally, Digital Ally's ability to provide ongoing software updates and customer support creates a recurring revenue model, further bolstering its financial performance.
Digital Ally Earnings Call Summary
Earnings Call Date:Aug 18, 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 | -14.25M | -84.00 | -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 | 996.75K |
| 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
Neutral
2.10
Price Trends
1.90
Positive
3.49
Negative
231.83
Negative
Market Momentum
0.03
Negative
53.61
Neutral
80.62
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DGLY, the sentiment is Neutral. The current price of 2.1 is above the 20-day moving average (MA) of 1.92, above the 50-day MA of 1.90, and below the 200-day MA of 231.83, indicating a neutral trend. The MACD of 0.03 indicates Negative momentum. The RSI at 53.61 is Neutral, neither overbought nor oversold. The STOCH value of 80.62 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DGLY.
Digital Ally Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
54 Neutral | 16.49M | 5.32 | ― | ― | 28.01% | ― | |
50 Neutral | 12.19M | -2.74 | -26.23% | ― | -13.20% | -89.43% | |
48 Neutral | 5.35M | -0.60 | -114.02% | ― | 13.96% | 85.22% | |
47 Neutral | 1.90M | >-0.01 | -44.99% | ― | 6.77% | 97.28% | |
41 Neutral | $3.85M | ― | -191.47% | ― | -20.52% | 83.27% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% |
* Communication Services Sector Average
Performance Comparison
DGLY
Digital Ally
2.10
-2,081.10
-99.90%
UUU
Universal Security Instruments
6.33
5.16
441.03%
LGMK
LogicMark
0.01
-4.21
-99.76%
BKYI
BIO-key International
0.76
-0.23
-23.23%
IVDA
Iveda Solutions
1.32
-0.46
-25.84%
VRME
VerifyMe
0.95
-0.45
-32.14%
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.