Digital Ally Drops 16.67% Amid Reverse Split

Digital Ally, Inc. (DGLY) has experienced a significant decline, dropping 16.67% in value, marking its fifth consecutive day of losses, with a cumulative decrease of 28.57% over the past five days.

The strategy of buying DGLY shares after the stock reached a recent low and holding for 1 week resulted in a significant loss. The 5-year backtested return was -99.94%, with a maximum drawdown of 100%. This indicates that this strategy would not have been profitable over the past 5 years, and the risk of further declines would have been high.

On May 21, 2025, Digital Ally, Inc. announced a 1-for-100 reverse stock split, effective May 23, 2025. This move is aimed at adjusting the company's outstanding shares, which could potentially impact the stock's trading dynamics and investor perception.

The company also reported a notable financial turnaround for the first quarter of 2025. Despite a decline in revenue from $5.5 million to $4.4 million, Digital Ally managed to improve its operating loss by 73.2%, reporting a loss of $974,680 compared to the first quarter of 2024. This improvement in operating performance is a positive sign for the company's financial health and operational efficiency.

Earnings per share for the first quarter of 2025 stood at $1.41, a stark contrast to the prior-year net loss of $27.48 per share. This significant turnaround in earnings is a testament to the company's efforts to improve its financial performance and could be a driving factor for investor confidence.

Analysts have projected a significant upside for the stock post-split, suggesting that the reverse stock split could lead to increased investor interest and potentially higher stock prices. This optimism is based on the company's recent financial improvements and the potential for further growth.