Head-To-Head Analysis: Digital Ally (NASDAQ:KUST) versus Arlo Technologies (NYSE:ARLO)

Arlo Technologies (NYSE:ARLO) and Digital Ally (NASDAQ:KUST) are both small-cap technology companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, dividends, earnings and risk.

Valuation & Earnings

This table compares Arlo Technologies and Digital Ally”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arlo Technologies	$529.30 million	2.74	$14.93 million	$0.27	49.48
Digital Ally	$16.51 million	0.27	-$6.67 million	($16.87)	-0.04

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

Analyst Ratings

This is a breakdown of current ratings and target prices for Arlo Technologies and Digital Ally, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arlo Technologies	0	2	5	0	2.71
Digital Ally	1	0	0	0	1.00

Arlo Technologies currently has a consensus price target of $20.60, indicating a potential upside of 54.19%. Given Arlo Technologies’ stronger consensus rating and higher possible upside, research analysts clearly believe Arlo Technologies is more favorable than Digital Ally.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Arlo Technologies	5.20%	17.29%	7.12%
Digital Ally	-96.36%	-277.67%	-56.35%

Insider and Institutional Ownership

83.2% of Arlo Technologies shares are owned by institutional investors. Comparatively, 4.2% of Digital Ally shares are owned by institutional investors. 2.9% of Arlo Technologies shares are owned by insiders. Comparatively, 0.0% of Digital Ally shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Arlo Technologies has a beta of 1.54, suggesting that its share price is 54% more volatile than the S&P 500. Comparatively, Digital Ally has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500.

Summary

Arlo Technologies beats Digital Ally on 14 of the 14 factors compared between the two stocks.

About Arlo Technologies

Arlo Technologies, Inc., together with its subsidiaries, provides a cloud-based platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific regions. The company offers Arlo Essential Cameras and Doorbells (2nd Generation) delivers smart home protection, including automated privacy shield, 180-degree field of view, and 2K video resolution; Arlo Home Security System, an all-in-one multi-sensor that provides access to security experts for monitoring and responding to emergency situations; Arlo Pro 5S, a wireless 2K video resolution security camera; Arlo Go 2, a camera for monitoring remote areas, large properties, construction sites, vacation homes, boat or RV slips, and hard-to-access areas; Arlo Ultra 2 provides 4K video with HDR, an ultra-wide, 180-degree field of view, auto zoom and tracking on moving objects, and color night vision; and Arlo Floodlight Camera, a wire-free floodlight camera. It provides security system accessories, charging accessories, and mounts. In addition, the company offers Arlo Secure subscriptions, including emergency response secure plus plan; 2K secure plan and 4K secure plus plan cloud-based video recording; unlimited cameras; advanced object detection; smart interactive notifications; smoke and CO alarm detection; cloud-based activity zone; call a friend; and 24/7 priority support and professional monitoring services; Arlo Total Security, a subscription which provides 24/7 professional monitoring and security hardware; Arlo Safe, a personal safety app that offers one-touch emergency response, family safety, and crash detection and response services; and Arlo SmartCloud, a SaaS solution that delivers security cloud services for business. It sells its products through retailers, wholesale distributors, broadcast channels, wireless carriers, and security solution providers, as well as through its website. Arlo Technologies, Inc. was incorporated in 2018 and is headquartered in Carlsbad, California.

About Digital Ally

Digital Ally, Inc. produces and sells digital video imaging, storage, and disinfectant and related safety products for use in law enforcement, security, and commercial applications in the United States and internationally. It operates through Video Solutions, Revenue Cycle Management, and Ticketing segments. The company offers in-car digital video mirror systems for law enforcement; in-car digital video event recorder systems for commercial fleets; a suite of data management web-based tools to assist fleet managers in the organization, archival, and management of videos and telematics information; miniature body-worn digital video systems for law enforcement and private security; and VuLink, an in-car device that enables an in-car digital audio/video system and a body worn digital audio/video camera system to automatically and simultaneously start recording. It also provides VuVault and EVO Web, a cloud-based evidence management system; FleetVU Manager, a web-based software for commercial fleet tracking and monitoring; ThermoVu, a non-contact temperature-screening instrument that measures temperature through the wrist and controls entry to facilities when temperature measurements exceed pre-determined parameters; and Shield disinfectants and cleansers, as well as other personal protective equipment and supplies, such as masks, gloves, sanitizer wipes, and electrostatic sprayer to health care workers and other consumers. In addition, the company offers working capital and back-office services, including insurance and benefit verification, medical treatment documentation and coding, and collections to healthcare organizations; and operates TicketSmarter.com, an online ticketing marketplace for ticket sales, partnerships, and ticket resale services for live events, including concerts, sporting events, theatres, and performing arts. Digital Ally, Inc. was founded in 2004 and is headquartered in Lenexa, Kansas.