Outlook Uncertain For Digital Ally

Hudson Securities has published a research report on Digital Ally (NASDAQ: DGLY) after the company announced that it has still not received payment for a South American order placed in April 2010 and also that the company may see more contracts with new customers in Mexico.

In the report, Hudson Securities writes "The foray into international markets seems to net big orders yet the South American order follows an order from Turkey that was also hung up because of timing issues on payment. Will the orders in Mexico be any different? We'll see, but at least international orders are starting to come in at a more regular pace. While it is frustrating to continually see inconsistent results with Digital Ally, there is an exciting product roll-out story here with the recently launched First Vu uniform-worn camera, the DV-250 event recorder for fleet vehicles, and the LaserAlly LIDAR speed detection system. Meanwhile, the company has no debt and a share repurchase authorization of $10 million which would allow the company to repurchase about a third of outstanding shares at its current price. Execution has certainly been uneven but the stock certainly shouldn't see much downside and the newly launched products are adding additional revenue streams beyond the lumpy DVM-750. Nevertheless, we are taking a much more conservative view on the earnings outlook until we see some meaningful revenue growth and are excluding expectations for shipment of the South American order."

Hudson Securities maintians its Buy rating and $3 price target.

Digital Ally closed Friday at $1.80.