Digital Ally Contract Valued at Only $200,000 — Hope for Much More

Digital Ally Inc. (NASDAQ: DGLY) traded higher in the premarket hours following an order from the U.S. military. The stock traded up 25% just after the market opened Friday morning. The U.S. military police placed an order for FirstVu HD body cameras linked to DVM-800 in-car video systems. The initial order is valued at approximately $200,000.

This order is substantial, not necessarily because of the size but the fact that it sets Digital Ally up for many subsequent orders. Still, the size of this contract may lead some investors to be a bit skeptical of such a small deal in a micro-cap stock.

Concerning recent events involving police abuse, many police departments are, in fact, considering getting body cameras, which would cut down on the incidence of abuse. Because Digital Ally is a leader in producing digital video imaging and storage products for law enforcement, it stands to make much more money as orders start to come in.

The company has experienced product shortages from this increased demand where consumers want to both test and evaluate the units. This is mixed news, because the increased demand is a sign that the company stands to grow a fair amount, but the company has to first meet its production goals, which could slow down how it ships its orders.

Stanton Ross, president and CEO of Digital Ally, further commented on this demand:

There is increasing demand that the in-car and body-worn systems “talk to each other,” and that evidence generated from both systems can be stored in the same back-office storage systems. We believe that we are the only provider of systems that meet these requirements, given our patented VuLink product.

Digital Ally has a consensus price target of $4.00 and a 52-week trading range of $3.03 to $33.59. It has a market cap of about $40 million.

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