Digital Ally (NASDAQ: HLIT) and Harmonic (NASDAQ:HLIT) are both small-cap industrial products companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, valuation, risk, institutional ownership and earnings.

Risk & Volatility

Digital Ally has a beta of 3.01, indicating that its stock price is 201% more volatile than the S&P 500. Comparatively, Harmonic has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Digital Ally and Harmonic, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digital Ally 0 1 1 0 2.50
Harmonic 0 2 2 0 2.50

Digital Ally currently has a consensus price target of $4.50, indicating a potential upside of 69.81%. Harmonic has a consensus price target of $5.67, indicating a potential upside of 6.92%. Given Digital Ally’s higher probable upside, equities research analysts plainly believe Digital Ally is more favorable than Harmonic.

Insider and Institutional Ownership

4.2% of Digital Ally shares are owned by institutional investors. Comparatively, 86.5% of Harmonic shares are owned by institutional investors. 19.8% of Digital Ally shares are owned by insiders. Comparatively, 6.2% of Harmonic shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Digital Ally -112.99% -1,999.82% -86.43%
Harmonic -11.52% -5.68% -2.46%

Valuation and Earnings

This table compares Digital Ally and Harmonic’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Digital Ally $12.77 million 1.60 -$12.25 million ($1.50) -1.77
Harmonic $358.25 million 1.27 -$82.95 million ($0.54) -9.81

Digital Ally has higher earnings, but lower revenue than Harmonic. Harmonic is trading at a lower price-to-earnings ratio than Digital Ally, indicating that it is currently the more affordable of the two stocks.

Summary

Harmonic beats Digital Ally on 7 of the 13 factors compared between the two stocks.

Digital Ally Company Profile

Digital Ally, Inc. produces and sells digital video imaging and storage products for use in law enforcement, security, and commercial applications in the United States and internationally. Its digital audio/video recording, storage, and other products include an in-car digital audio/video recorder that is contained in a rear view mirror for law enforcement vehicles and commercial fleets; and hands-free automatic activated body-worn cameras and in-car video systems, as well as provides its law enforcement customers with audio/video surveillance from multiple vantage points. The company also provides VuLink, an in-car device that enables an in-car and body worn digital audio/video camera system to automatically and simultaneously start recording; and Digital Ally, a suite of data management Web-based tools to assist fleet managers in the organization, archival, and management of videos and telematics information. In addition, its digital audio/video recording, storage, and other products comprise a miniature body-worn digital video system; VuVault.net, a law enforcement cloud storage solution, including cloud-based fleet management and driver monitoring/training applications; and FleetVU Manager, a Web-based software for commercial fleet tracking and monitoring. The company sells its products through direct sales and third-party distributors. Digital Ally, Inc. is headquartered in Lenexa, Kansas.

Harmonic Company Profile

Harmonic Inc. designs, manufactures, and sells video infrastructure products and system solutions worldwide. Its products enable customers to create, prepare, and deliver a range of video and broadband services to consumer devices, including televisions, personal computers, laptops, tablets, and smart phones. The company operates in two segments, Video and Cable Edge. The Video segment sells video processing, and production and playout solutions and services to cable operators, and satellite and telecommunications Pay-TV service providers, as well as to broadcast and media companies, including streaming new media companies. This segment's video processing solutions include network management and application software, and hardware products, such as cloud media processing, broadcast and distribution encoders, contribution encoders, multiscreen transcoders and stream processing systems, multiscreen delivery, decoders and descramblers, and video servers. This segment also provides video-optimized storage systems; and unified video playout and processing software-as-a-service solutions. The Cable Edge segment offers cable edge solutions and related services, including CableOS software-based converged cable access platform solutions; and narrowcast services gateway products primarily to cable operators. The company also provides technical support and professional services, such as maintenance and support, consulting, implementation, program management, technical design and planning, building and site preparation, integration and equipment installation, system testing, and training. Harmonic Inc. sells its products through its direct sales force, as well as through independent resellers and systems integrators. The company was founded in 1988 and is headquartered in San Jose, California.

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