NEW YORK (TheStreet) -- Shares of Digital Ally Inc. (DGLY - Get Report) are soaring, up 18.54% to $13.62 in pre-market trading, after the digital video company received its first purchase order under a newly extended contract valued at more than $1.1 million from the Michigan state police.
The order is expected to ship in the quarter ending September 30.
The value of the contract awarded to Digital Ally now totals $6.5 million, including the original three year contract plus the two extensions that are now in effect.
Digital Ally develops, manufactures and markets advanced video surveillance products for law enforcement, homeland security and commercial applications.
Separately, TheStreet Ratings team rates DIGITAL ALLY INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"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
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