NEW YORK (TheStreet) -- Digital Ally (DGLY - Get Report) stock continued to soar Monday after the company said it had received increased interest its FirstVU HD wearable camera as unrest continues in Ferguson, Mo.
Digital Ally announced in a press release that several law enforcement agencies had asked about the FirstVU HD Officer-Worn Video System since the turmoil in the city began.
"An audio/video recording often proves to be invaluable in court because it can answer critical questions regarding inappropriate actions by either the law enforcement officer or the person who may have broken the law," the company said in a statement. "Some state governments are considering legislation that would require all law enforcement vehicles and officers to be equipped with some sort of audio/video recording capabilities."
"We rate DIGITAL ALLY INC (DGLY) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- DIGITAL ALLY INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, DIGITAL ALLY INC reported poor results of -$1.14 versus -$0.99 in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 864.0% when compared to the same quarter one year ago, falling from $0.11 million to -$0.87 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, DIGITAL ALLY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$0.75 million or 493.70% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of DIGITAL ALLY INC has not done very well: it is down 18.78% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- You can view the full analysis from the report here: DGLY Ratings Report
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE.