Digi International Inc.

Valuation Analysis

About the Company

Digi International Inc. provides business and mission-critical Internet of Things (IoT) connectivity products, services, and solutions in the United States, Europe, the Middle East, Africa, and internationally. It operates through IoT Products & Services, and IoT Solutions segments. The company offers cellular routers for mission-critical wireless connectivity; cellular modules to embed cellular communications abilities into the products to deploy and manage intelligent and secure cellular connected products; console servers to provide secure and remote access to network equipment in data centers and at edge locations; and radio frequency products, including embedded wireless modules, off-the-shelf gateways, modems, and adapters under the Digi XBee brand. It also provides embedded system p

Digi International Inc. Stock at a Glance

Digi International Inc. (DGII) is currently trading at $68.68 with a market capitalization of $2.6B. The trailing P/E ratio stands at 60.78x, with a forward P/E of 24.53x. The 52-week range spans from $30.69 to $70.79; the current price is 3% below the yearly high. Year-over-year revenue growth stands at +25.1%. The net profit margin stands at 9.1%.

💰 Dividend

Digi International Inc. currently does not pay a dividend. The company typically reinvests its earnings into growth initiatives and product development.

📊 Analyst Rating

5 analysts rate Digi International Inc. (DGII) on consensus: Strong Buy. The average price target is $72.20, implying +5.13% from the current price. Analyst price targets range from $63.00 to $78.00.

Digi International Inc.: The Investment Case in Detail

Digi International Inc. (DGII) operates in the Technology — specifically Communication Equipment — and is headquartered in United States. Below is a structured read of the investment case built directly from the latest fundamentals, valuation multiples, analyst positioning and smart-money flows. Each section translates raw numbers into the investment logic they imply, so you can decide whether the risk/reward fits your portfolio.

The Bull Case

Top-line momentum is unusually strong with revenue expanding 25.1% year-over-year, a pace that puts the company well above the market average and signals genuine demand traction rather than mere cyclical tailwind. With a gross margin near 64.47%, the company sits in the top tier of its industry — these are the kinds of structural margins that protect earnings during downturns.

The Bear Case

Our valuation screen flags the stock as overvalued — current multiples imply the business needs to deliver well above its recent trajectory to justify the price.

Valuation in Context

With a PEG ratio of 0.98, the price-to-earnings multiple is actually below the company's growth rate — classic value-meets-growth territory that Peter Lynch would have called a 'GARP' opportunity. The EV/EBITDA multiple of 26.16x reflects rich expectations — historically, multiples at this level have proven hard to maintain for more than a few quarters.

What to Watch Next

• The forward P/E of 24.53x is meaningfully below the trailing 60.78x — analysts expect earnings to step up; the next earnings release is the test.
• The share is trading at 94.7% of its 52-week range — a break above the recent high opens technical upside, a failure here often invites profit-taking.

Investment Thesis: Strengths & Weaknesses

Technical Snapshot

Price trades above both the 50- and 200-day moving averages, with 50d above 200d — a classic bullish setup (golden-cross alignment).

Risk Profile

The data points to relatively defensive market behavior, elevated short interest (7.11%).

Trading Data

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