Digi International (DGII) AI Stock Analysis

• Market Cap: $1.61B
• Dividend Yield: N/A
• Average Volume (3M): 278.07K
• Price to Earnings (P/E): 39.9
• Beta (1Y): 1.31
• Revenue Growth: 1.46%
• EPS Growth: 78.77%
• Country: US
• Employees: 805
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 0.56
• Shares Outstanding: 37,589,333
• 10 Day Avg. Volume: 225,903
• 30 Day Avg. Volume: 278,074
• PEG Ratio: 0.43
• Price to Book (P/B): 2.12
• Price to Sales (P/S): 3.13
• P/FCF Ratio: 12.48
• Enterprise Value/Market Cap: 0.93
• Enterprise Value/Revenue: 3.47
• Enterprise Value/Gross Profit: 5.51
• Enterprise Value/Ebitda: 16.82
• 1Y Price Target: $48.80
• Price Target Upside: 14.21% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 2.39
• Revenue Forecast (FY): $480.35M

• Rating: 68 Neutral
• Price Target: $48.00 ▲(12.33% Upside)

DGII’s score is driven primarily by solid financial performance—especially strong free cash flow and improving profitability—supported by a positive earnings outlook with ARR-led growth. This is offset by a relatively high P/E valuation and only moderate technical momentum in the near term.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective sales strategies, enhancing Digi's competitive position in the IoT sector.

Annual Recurring Revenue Growth

Strong ARR growth reflects successful customer retention and subscription model, providing a stable and predictable revenue stream.

Cash Flow and Debt Management

Effective cash flow management and debt repayment enhance financial stability, allowing for strategic investments and reducing financial risk.

Negative Factors

Rising Total Debt

Rising debt levels can limit financial flexibility and increase interest obligations, potentially affecting long-term growth and operational capacity.

Geopolitical Uncertainty

Geopolitical uncertainties can delay business decisions and impact market stability, posing risks to strategic planning and revenue forecasts.

European Market Challenges

Slower growth in Europe limits expansion opportunities and may require additional resources to overcome market fragmentation and competition.

Digi International Business Overview & Revenue Model

Company Description

Digi International Inc. provides business and mission-critical Internet of Things (IoT) products, services, and solutions in the United States and internationally. The company operates in two segments, IoT Products & Services and IoT Solutions. It 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. The company provides embedded system products under the Digi Connect, ConnectCore, and Rabbit brands; and infrastructure management products, comprising of serial servers, which offers serial port-to-Ethernet integration of devices into wired Ethernet networks; and universal serial bus solutions. In addition, it offers Digi Remote Manager, a recurring revenue cloud-based service that provides a secure environment for customers to manage their connected device deployment; Digi Wireless Design Services; and SmartSense by Digi for monitoring wirelessly the temperature of food and other perishable or sensitive goods, monitor facilities or pharmacies by tracking the completion of operating tasks by employees, as well as quality control and incident management for food service, healthcare, and transportation/logistics industries. Further, the company provides professional services, such as site planning, implementation management, application development, and customer training; data plan subscriptions; and enhanced technical support services. Digi International Inc. was incorporated in 1985 and is headquartered in Hopkins, Minnesota.

How the Company Makes Money

Digi International generates revenue through multiple streams, primarily by selling IoT hardware, including cellular routers and embedded modules, which are crucial for establishing connectivity in various applications. Additionally, the company earns income from software solutions that assist customers in managing their IoT devices and analyzing the data they generate. Digi also offers subscription-based services for its device management platforms, which provide ongoing revenue. Key partnerships with telecommunications providers and technology companies enhance its offerings and market reach, contributing significantly to its earnings. Furthermore, the growing demand for IoT solutions across multiple sectors continues to drive revenue growth for Digi International.

Digi International Financial Statement Overview

Summary

Digi International exhibits strong financial performance with consistent revenue growth, improved profitability, and robust cash flow generation. However, attention is needed on operational efficiency and recent debt increases.

Income Statement

Digi International has shown consistent revenue growth over the years, with a slight dip in 2024. The gross profit margin has improved, reaching 62.9% in 2025, indicating strong cost management. Net profit margin has also improved to 9.5% in 2025, reflecting enhanced profitability. However, the EBIT and EBITDA margins have shown some volatility, with EBITDA margin decreasing in 2025. Overall, the company demonstrates solid growth and profitability, though there are fluctuations in operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has remained relatively low, indicating prudent financial leverage. Return on equity has improved to 6.4% in 2025, showing better utilization of equity. The equity ratio remains strong, suggesting a stable financial structure. However, the increase in total debt in 2025 warrants attention, as it could impact future financial flexibility.

Cash Flow

Digi International has demonstrated strong free cash flow growth, particularly in 2025, with a free cash flow to net income ratio of 1.0, indicating efficient cash generation relative to earnings. The operating cash flow to net income ratio is stable, reflecting consistent cash flow management. The company shows robust cash flow performance, supporting its operational and strategic initiatives.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	430.22M	430.22M	424.05M	444.85M	388.23M	308.63M
Gross Profit	270.68M	270.68M	249.91M	252.20M	216.29M	166.66M
EBITDA	88.66M	84.07M	71.34M	84.11M	75.89M	31.26M
Net Income	40.80M	40.80M	22.50M	24.77M	19.38M	10.37M
Balance Sheet
Total Assets	922.65M	922.65M	815.08M	835.53M	853.89M	619.53M
Cash, Cash Equivalents and Short-Term Investments	21.90M	21.90M	27.51M	31.69M	34.90M	152.43M
Total Debt	159.15M	171.18M	137.39M	220.91M	258.14M	66.80M
Total Liabilities	286.57M	286.57M	234.04M	295.04M	352.38M	147.01M
Stockholders Equity	636.08M	636.08M	581.03M	540.49M	501.51M	472.52M
Cash Flow
Free Cash Flow	107.96M	107.96M	80.87M	32.41M	35.77M	55.47M
Operating Cash Flow	107.96M	107.96M	83.09M	36.75M	37.74M	57.72M
Investing Cash Flow	-148.33M	-148.33M	3.00K	-4.34M	-349.53M	-21.36M
Financing Cash Flow	34.62M	34.62M	-89.05M	-34.50M	192.78M	62.24M

Digi International Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 42.73
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DGII, the sentiment is Positive. The current price of 42.73 is below the 20-day moving average (MA) of 43.41, above the 50-day MA of 41.87, and above the 200-day MA of 35.44, indicating a neutral trend. The MACD of -0.05 indicates Positive momentum. The RSI at 51.30 is Neutral, neither overbought nor oversold. The STOCH value of 54.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DGII.

Digi International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ITRN	79 Outperform	$877.51M	15.52	28.62%	4.38%	5.20%	9.14%
HLIT	74 Outperform	$1.12B	24.12	11.38%	―	1.93%	-43.22%
DGII	68 Neutral	$1.61B	39.86	6.71%	―	1.46%	78.77%
AIOT	67 Neutral	$749.42M	-18.16	-8.98%	―	92.56%	85.10%
LTRX	63 Neutral	$253.86M	-25.80	-13.39%	―	-26.85%	-93.91%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
NTGR	49 Neutral	$635.65M	-24.94	-4.94%	―	2.95%	-228.28%

Digi International Corporate Events

Digi International Expands Revolving Credit Facility and Flexibility

On December 23, 2025, Digi International, Inc. amended its existing revolving credit agreement with BMO Bank N.A. and a syndicate of lenders, revising the pricing structure and expanding its potential borrowing capacity. The amendment introduced a fifth pricing tier tied to a higher total net leverage ratio, generally reduced applicable margin percentages for both Term SOFR and base rate loans at lower leverage levels, eliminated the 10-basis-point credit spread adjustment on Term SOFR loans, and increased the uncommitted accordion feature for additional borrowing from the greater of $95 million to the greater of $105 million or one hundred percent of trailing twelve-month adjusted EBITDA, thereby enhancing Digi’s financial flexibility and potentially lowering its interest costs over time.

The most recent analyst rating on (DGII) stock is a Buy with a $45.00 price target. To see the full list of analyst forecasts on Digi International stock, see the DGII Stock Forecast page.