Digi International (DGII) AI Stock Analysis

• Market Cap: $1.56B
• Dividend Yield: N/A
• Average Volume (3M): 202.89K
• Price to Earnings (P/E): 38.6
• Beta (1Y): 1.32
• 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: 37,232,594
• 10 Day Avg. Volume: 283,754
• 30 Day Avg. Volume: 202,894
• 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: 0.98
• Enterprise Value/Revenue: 3.56
• Enterprise Value/Gross Profit: 5.66
• Enterprise Value/Ebitda: 17.29
• 1Y Price Target: $48.25
• Price Target Upside: 16.01% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 2.39
• Revenue Forecast (FY): $480.35M

• Rating: 77 Outperform
• Price Target: $45.00 ▲(8.20% Upside)

Digi International's strong financial performance and technical indicators drive a positive outlook, despite valuation concerns. The earnings call supports growth prospects, though geopolitical and market challenges require monitoring.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial health.

ARR Growth

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

Cash Flow Generation

Robust cash flow generation enhances financial flexibility, enabling strategic investments and debt reduction.

Negative Factors

Debt Increase

Rising debt levels may strain cash flow and limit the company's ability to invest in growth opportunities, affecting long-term stability.

Geopolitical Uncertainty

Geopolitical uncertainties can delay business decisions and impact market dynamics, posing risks to sustained growth.

Market Challenges

Market-specific slowdowns in key sectors can hinder revenue growth and require strategic adjustments to maintain performance.

Digi International Business Overview & Revenue Model

Company Description

Digi International (DGII) is a leading provider of Internet of Things (IoT) connectivity solutions, offering a comprehensive range of products and services that enable organizations to connect, manage, and analyze data from remote assets. The company operates primarily in sectors such as industrial automation, smart cities, energy, and healthcare. Its core products include cellular routers, embedded modules, and devices that facilitate secure IoT connectivity, as well as software solutions that enhance device management and data analytics.

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

Digi International Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 41.59
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 41.59 is above the 20-day moving average (MA) of 38.30, above the 50-day MA of 37.75, and above the 200-day MA of 33.33, indicating a bullish trend. The MACD of 1.26 indicates Negative momentum. The RSI at 64.28 is Neutral, neither overbought nor oversold. The STOCH value of 75.29 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	$796.54M	14.09	28.62%	5.15%	5.20%	9.14%
DGII	77 Outperform	$1.56B	38.60	6.71%	―	1.46%	78.77%
HLIT	70 Outperform	$1.19B	24.62	11.38%	―	1.93%	-43.22%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
AIOT	61 Neutral	$665.11M	―	-8.98%	―	92.56%	85.10%
LTRX	61 Neutral	$201.52M	―	-13.39%	―	-26.85%	-93.91%
NTGR	49 Neutral	$751.25M	―	-4.94%	―	2.95%	-228.28%

Digi International Corporate Events

Digi International’s Earnings Call: Strong Growth Amid Challenges

Digi International’s Recent Earnings Call: A Mixed Sentiment with Strong Performance and Emerging Challenges

Digi International Reports Strong Fiscal 2025 Results

Digi International Inc. is a global leader in providing Internet of Things (IoT) connectivity products, services, and solutions, known for its secure and reliable communication infrastructures in demanding environments. In its latest earnings report, Digi International announced record quarterly revenue of $114 million and an annualized recurring revenue (ARR) of $152 million for the fourth fiscal quarter of 2025. The company also reported a full-year cash flow from operations of $108 million, highlighting its strong financial performance despite market challenges. Key financial metrics for the fourth fiscal quarter of 2025 included a 9% increase in revenue, a gross profit margin of 63.9%, and an adjusted EBITDA of $29 million, marking an 11% increase. The acquisition of Jolt Software contributed significantly to the growth in the IoT Solutions segment, with a 23% increase in quarterly revenue. Looking ahead, Digi International remains optimistic about its growth prospects, projecting a 10-15% increase in revenue and a 15-20% rise in adjusted EBITDA for fiscal 2026, driven by expanding software applications and AI uses in the IoT market.