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Digital Ally (DGLY)
:DGLY
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Digital Ally
(NASDAQ:DGLY)
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Rating:39Underperform
Price Target:
$1.50
▼(-19.35% Downside)
Digital Ally's overall stock score is primarily impacted by its weak financial performance and concerning valuation metrics. The company's ongoing financial struggles, combined with bearish technical indicators, suggest significant risks. The lack of earnings and dividend yield further detracts from its attractiveness to investors.
Digital Ally (DGLY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.94M
Dividend YieldN/A
Average Volume (3M)29.28K
Price to Earnings (P/E)―
Beta (1Y)1.61
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. Volume19,102
30 Day Avg. Volume29,280
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 Cap1.52
Enterprise Value/Revenue0.24
Enterprise Value/Gross Profit0.95
Enterprise Value/Ebitda-0.31
Forecast
1Y Price Target
$4.00Price Target Upside115.05% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Digital Ally Business Overview & Revenue Model
Company DescriptionDigital Ally, Inc. is a technology company specializing in advanced digital video recording systems and software solutions primarily for law enforcement agencies, security personnel, and fleet management. The company operates within the public safety and transportation sectors, offering a range of products including body cameras, in-car video systems, and cloud-based video management solutions designed to enhance accountability and operational efficiency.
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
Negative
1.86
Price Trends
1.91
Negative
1.98
Negative
66.78
Negative
Market Momentum
-0.08
Positive
32.03
Neutral
7.19
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 1.86 is above the 20-day moving average (MA) of 1.83, below the 50-day MA of 1.91, and below the 200-day MA of 66.78, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 32.03 is Neutral, neither overbought nor oversold. The STOCH value of 7.19 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% | |
59 Neutral | $44.93M | 29.87 | ― | ― | ― | ― | |
46 Neutral | $4.77M | -0.55 | -145.28% | ― | 13.96% | 85.22% | |
46 Neutral | $11.46M | -2.69 | -28.37% | ― | -13.20% | -89.43% | |
41 Neutral | $17.77M | -1.87 | -21.54% | ― | 4.38% | 74.69% | |
39 Underperform | $2.94M | ― | -191.47% | ― | -20.52% | 83.27% |
* Communication Services Sector Average
DGLY
Digital Ally
1.64
-1,618.36
-99.90%
SPCB
SuperCom
10.17
6.65
188.92%
BKYI
BIO-key International
0.63
-0.53
-45.34%
IVDA
Iveda Solutions
0.85
-0.50
-37.04%
VRME
VerifyMe
0.85
-0.42
-32.94%
GFAI
Guardforce AI Co
0.85
-0.28
-24.78%
Digital Ally Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Digital Ally Secures $750K in Convertible Notes Deal
Positive
Sep 17, 2025
On September 15, 2025, Digital Ally, Inc. completed the initial closing of a Securities Purchase Agreement with an investor, issuing Senior Secured Convertible Notes and warrants, resulting in gross proceeds of $750,000. The company also entered into a Common Stock Purchase Agreement, securing a committed equity financing facility of up to $25 million, allowing for strategic financial flexibility and potential market expansion.
The most recent analyst rating on (DGLY) stock is a Hold with a $2.00 price target. To see the full list of analyst forecasts on Digital Ally stock, see the DGLY Stock Forecast page.
Digital Ally Reports Q2 2025 Earnings with Revenue Growth
Aug 19, 2025
Digital Ally, Inc. is a company operating in the video solutions, revenue cycle management, and entertainment sectors, known for its digital video imaging products and services, healthcare management solutions, and ticketing operations. In its latest earnings report for the quarter ending June 30, 2025, Digital Ally reported a slight increase in total revenue compared to the same period last year, reaching $5.63 million. However, the company faced a net loss of $4.49 million, reflecting ongoing challenges in managing costs and optimizing operations. Key financial metrics revealed a decrease in product revenue but a steady performance in service and other revenue streams. The company also highlighted a significant reduction in liabilities, indicating efforts to stabilize its financial position. Looking ahead, Digital Ally’s management remains focused on strategic initiatives to enhance operational efficiency and explore growth opportunities across its diverse business segments.
Digital Ally Delays 10-Q Filing Due to Review
Aug 14, 2025
Digital Ally, Inc. has announced a delay in filing its Form 10-Q (Quarter Report) for the financial period ending June 30, 2025. The company cited the need for additional time to prepare and review its financial statements to ensure adequate disclosure as the primary reason for the delay. Digital Ally expects to file the report on or before the fifth business day following the prescribed due date. The company does not anticipate any significant changes in its financial results from the corresponding period of the previous fiscal year. Digital Ally is committed to maintaining compliance with its reporting obligations, as evidenced by the signature of Thomas J. Heckman, the Chief Financial Officer, on the notification.
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.