Head to Head Analysis: Digital Ally (NASDAQ:KUST) & Data I/O (NASDAQ:DAIO)

Data I/O (NASDAQ:DAIO) and Digital Ally (NASDAQ:KUST) are both small-cap technology companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, earnings, analyst recommendations and valuation.

Institutional & Insider Ownership

37.0% of Data I/O shares are owned by institutional investors. Comparatively, 4.2% of Digital Ally shares are owned by institutional investors. 4.1% of Data I/O shares are owned by company insiders. Comparatively, 0.0% of Digital Ally shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Data I/O and Digital Ally”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Data I/O	$21.50 million	1.26	-$5.24 million	($0.93)	-3.10
Digital Ally	$13.75 million	0.31	-$6.67 million	($16.87)	-0.04

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

Risk and Volatility

Data I/O has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500. Comparatively, Digital Ally has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500.

Profitability

This table compares Data I/O and Digital Ally’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Data I/O	-48.73%	-66.83%	-40.69%
Digital Ally	-96.36%	-277.67%	-56.35%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Data I/O and Digital Ally, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Data I/O	1	1	1	2	2.80
Digital Ally	1	0	0	0	1.00

Data I/O presently has a consensus price target of $5.11, suggesting a potential upside of 77.43%. Given Data I/O’s stronger consensus rating and higher possible upside, analysts clearly believe Data I/O is more favorable than Digital Ally.

Summary

Data I/O beats Digital Ally on 14 of the 15 factors compared between the two stocks.

About Data I/O

Data I/O Corporation, together with its subsidiaries, engages in the design, manufacture, and sale of programming and security deployment systems and services for electronic device manufacturers in the United States, Europe, and internationally. Its programming system products are used to program integrated circuits (ICs) with the specific data for the ICs. The company offers PSV handlers off-line automated programming systems, such as PSV2800 automated programming system which focuses on high-volume manufacturing in a lower cost platform; PSV7000 automated programming system for security deployment upgrades; PSV5000 automated programming system that combines mid-range capacity and supports security deployment; and PSV3500 automated programming system which provides basic programming needs. It also provides SentriX security deployment system; and LumenX and non-automated FlashPAK III programming systems. In addition, the company offers hardware support, system installation and repair, and device programming services. It markets and sells its products to original equipment manufacturers in automotive and consumer electronics, internet of things, and industrial, as well as electronic manufacturing service contract manufacturers through direct sales, and indirect sales representatives and distributors. Data I/O Corporation was incorporated in 1969 and is headquartered in Redmond, Washington.

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.