Digital Ally, Inc. (NASDAQ:DGLY) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
It's been a mediocre week for Digital Ally, Inc. (NASDAQ:DGLY) shareholders, with the stock dropping 13% to US$0.76 in the week since its latest quarterly results. It looks like weak result overall, with ongoing losses and revenues of US$9.4m falling short of analyst predictions. The losses were a relative bright spot though, with a per-share (statutory) loss of US$0.02 being 83% smaller than what the analysts had presumed. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for Digital Ally
Following the latest results, Digital Ally's two analysts are now forecasting revenues of US$45.0m in 2022. This would be a sizeable 25% improvement in sales compared to the last 12 months. Earnings are expected to tip over into lossmaking territory, with the analysts forecasting statutory losses of -US$0.47 per share in 2022. Before this latest report, the consensus had been expecting revenues of US$52.6m and US$0.43 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.
The average price target fell 51% to US$2.75, implicitly signalling that lower earnings per share are a leading indicator for Digital Ally's valuation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Digital Ally's rate of growth is expected to accelerate meaningfully, with the forecast 56% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 13% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Digital Ally is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for Digital Ally going out as far as 2023, and you can see them free on our platform here.
Even so, be aware that Digital Ally is showing 4 warning signs in our investment analysis , and 1 of those is concerning...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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