Financial Analysis: ADT (ADT) vs. Digital Ally (DGLY)

ADT (NYSE: ADT) and Digital Ally (NASDAQ:DGLY) are both industrial products companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, dividends, risk, analyst recommendations and earnings.

Profitability

This table compares ADT and Digital Ally’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ADT N/A N/A N/A
Digital Ally -80.08% -195.04% -64.01%

Insider and Institutional Ownership

3.9% of Digital Ally shares are owned by institutional investors. 19.0% of Digital Ally shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for ADT and Digital Ally, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ADT 0 1 7 0 2.88
Digital Ally 0 0 2 0 3.00

ADT presently has a consensus target price of $16.25, suggesting a potential upside of 36.10%. Digital Ally has a consensus target price of $6.00, suggesting a potential upside of 181.69%. Given Digital Ally’s stronger consensus rating and higher possible upside, analysts clearly believe Digital Ally is more favorable than ADT.

Earnings & Valuation

This table compares ADT and Digital Ally’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ADT $2.95 billion 3.03 -$536.58 million N/A N/A
Digital Ally $16.58 million 0.90 -$12.71 million ($2.13) -1.00

Digital Ally has lower revenue, but higher earnings than ADT.

Summary

ADT beats Digital Ally on 6 of the 11 factors compared between the two stocks.

About ADT

ADT Inc. is a provider of monitored security, interactive home and business automation and related monitoring services in the United States and Canada. The Company offers a range of products home security systems, home automation, security cameras, fire, home and safety, and monitoring services. It also offers residential, commercial, and multi-site customers a comprehensive set of burglary, video, access control, fire and smoke alarm, and medical alert solutions. Its 24/7 monitoring capabilities are enabled by 12 monitoring centers.

About Digital Ally

Digital Ally, Inc. produces digital video imaging and storage products for use in law enforcement, security and commercial applications. The Company’s products include in-car digital video/audio recorder contained in a rear-view mirror for use in law enforcement and commercial fleets; a system that provides its law enforcement customers with audio/video surveillance from multiple vantage points and hands-free automatic activation of body-worn cameras and in-car video systems; a weather-resistant mobile digital video recording system for use on motorcycles, all-terrain vehicles (ATVs) and boats; a miniature digital video system designed to be worn on an individual’s body, and a hand-held laser speed detection device that it offers primarily to law enforcement agencies. The Company sells its products to law enforcement agencies and other security organizations, consumer and commercial fleet operators through direct sales domestically and third-party distributors internationally.

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