Digi International Inc. (DGII)
NASDAQ:DGII
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Digi International
(NASDAQ:DGII)
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Rating:76Outperform
Price Target:
$62.00
▲(14.71% Upside)
Action:ReiteratedDate:03/06/26
The score is driven primarily by strong financial performance (high margins, improved profitability, and robust free cash flow with moderate-to-low leverage) and a favorable earnings outlook with growth-oriented FY2026 guidance and strong ARR/EBITDA momentum. Technicals add support via a clear uptrend. The main offset is valuation (high P/E and no dividend yield provided), with corporate events modestly supportive.
Positive Factors
Strong Free Cash Flow
Sustained FCF of roughly $114M and ~1.0x conversion to net income provides durable funding for R&D, acquisitions, and working capital. High cash generation improves financial optionality, lowers refinancing risk and supports multi-year strategic investments without heavy leverage.
Negative Factors
Uneven Revenue Growth
Inconsistent top-line trends, including a 2024 decline, make long-term forecasting and capacity planning harder. For a hardware-plus-services firm, uneven sales increase risk of underutilized fixed costs and can limit consistent margin expansion even if profitability metrics improve episodically.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Free Cash Flow
Sustained FCF of roughly $114M and ~1.0x conversion to net income provides durable funding for R&D, acquisitions, and working capital. High cash generation improves financial optionality, lowers refinancing risk and supports multi-year strategic investments without heavy leverage.
Read all positive factors
Digi International (DGII) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.03B
Dividend YieldN/A
Average Volume (3M)275.72K
Price to Earnings (P/E)34.5
Beta (1Y)1.24
Revenue Growth1.46%
EPS Growth78.77%
CountryUS
Employees805
SectorTechnology
Sector Strength88
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.56
Shares Outstanding37,611,160
10 Day Avg. Volume256,078
30 Day Avg. Volume275,720
Financial Highlights & Ratios
PEG Ratio0.43
Price to Book (P/B)2.12
Price to Sales (P/S)3.13
P/FCF Ratio12.79
Enterprise Value/Market Cap1.06
Enterprise Value/Revenue4.80
Enterprise Value/Gross Profit7.63
Enterprise Value/Ebitda23.05
Forecast
1Y Price Target
$51.25Price Target Upside-5.18% Downside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)2.31
Revenue Forecast (FY)$479.12M
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...
How the Company Makes Money
Digi International primarily makes money by selling IoT connectivity products and related software and services. A major revenue stream is product sales of networking and connectivity hardware (e.g., cellular routers/gateways, embedded connectivit...
Digi International Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down income from various business areas, helping investors see which segments are growing and contributing most to the company's top line.
Breaks down income from various business areas, helping investors see which segments are growing and contributing most to the company's top line.
Data provided by:
The Fly
The FlyDigi International Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call conveyed strong operating momentum: record revenue, double-digit ARR growth (+31% YoY), improved adjusted EBITDA (+23% YoY) and robust cash generation. Management emphasized successful integrations (Jolt) and a strategic acquisition (Particle) that expands edge-to-cloud capabilities and adds $20M ARR. Guidance for fiscal 2026 is growth-oriented (ARR +23%, revenue +14–18%, adjusted EBITDA +17–21%), though management remained prudent on updating full-year guidance after only one quarter. Key risks include memory pricing/supply volatility, uncertainty around the duration of AI infrastructure demand, and macro headwinds (tariffs, commodity prices). Overall, positives (record metrics, strong ARR and margin expansion, strategic M&A) outweigh the noted execution and market risks, producing a favorable near-term outlook while acknowledging risks to sustainment.Positive Updates
Record Quarterly Revenue and Strong YoY Growth
Revenue of $122.0M in Q1 FY2026, up 18% year-over-year; company noted this quarter set several all-time records.
Negative Updates
Cautious Full-Year Guide Despite Strong Q1
Management did not materially raise full-year revenue guidance after Q1 (historical practice to avoid raising annual guide after Q1); Particle accounted for ~3 of ~4 points of guide uplift, leaving midpoint guidance largely unchanged vs. prior midpoint (company cited prudence and timing uncertainty).
Read all updates
Q1-2026 Updates
Positive
Negative
Record Quarterly Revenue and Strong YoY Growth
Revenue of $122.0M in Q1 FY2026, up 18% year-over-year; company noted this quarter set several all-time records.
Read all positive updates
Company Guidance
For fiscal 2026 Digi guided to 23% ARR growth, 14–18% revenue growth and 17–21% adjusted EBITDA growth, noting Particle’s contribution of $20–22M of ARR, $13–14M of revenue and $1–2M of adjusted EBITDA (with Particle expected to add ~$5M to fiscal 2027 adjusted EBITDA after synergies); Q2 revenue was guided to $124–128M and Q2 adjusted EBITDA to $31.5–33M; full-year adjusted net income per diluted share is forecast at $0.56–0.59 (assumes 38.8M diluted shares) and includes an expected interest impact of $0.05–0.06 per share, and the company said these non‑GAAP metrics are not reconciled to GAAP.Digi International Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
86
Very Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 448.82M | 430.22M | 424.05M | 444.85M | 388.23M | 308.63M |
| Gross Profit | 282.67M | 270.68M | 249.91M | 252.20M | 216.29M | 166.66M |
| EBITDA | 93.53M | 84.07M | 71.34M | 84.11M | 75.89M | 31.26M |
| Net Income | 42.43M | 40.80M | 22.50M | 24.77M | 19.38M | 10.37M |
Balance Sheet | ||||||
| Total Assets | 918.44M | 922.65M | 815.08M | 835.53M | 853.89M | 619.53M |
| Cash, Cash Equivalents and Short-Term Investments | 30.93M | 21.90M | 27.51M | 31.69M | 34.90M | 152.43M |
| Total Debt | 154.28M | 179.85M | 137.39M | 220.91M | 258.14M | 66.80M |
| Total Liabilities | 269.23M | 286.57M | 234.04M | 295.04M | 352.38M | 147.01M |
| Stockholders Equity | 649.20M | 636.08M | 581.03M | 540.49M | 501.51M | 472.52M |
Cash Flow | ||||||
| Free Cash Flow | 113.99M | 105.33M | 80.87M | 32.41M | 35.77M | 55.47M |
| Operating Cash Flow | 113.87M | 107.96M | 83.09M | 36.75M | 37.74M | 57.72M |
| Investing Cash Flow | -147.39M | -148.33M | 3.00K | -4.34M | -349.53M | -21.36M |
| Financing Cash Flow | 38.22M | 34.62M | -89.05M | -34.50M | 192.78M | 62.24M |
Digi International Technical Analysis
Positive
54.05
Price Trends
49.46
Positive
46.44
Positive
40.90
Positive
Market Momentum
1.57
Negative
62.42
Neutral
86.45
Negative
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 54.05 is above the 20-day moving average (MA) of 50.80, above the 50-day MA of 49.46, and above the 200-day MA of 40.90, indicating a bullish trend. The MACD of 1.57 indicates Negative momentum. The RSI at 62.42 is Neutral, neither overbought nor oversold. The STOCH value of 86.45 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DGII.
Digi International Risk Analysis
Digi International disclosed 39 risk factors in its most recent earnings report. Digi International reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Digi International Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $1.08B | 14.75 | 28.06% | 4.38% | 5.20% | 9.14% | |
76 Outperform | $2.03B | 34.52 | 6.76% | ― | 1.46% | 78.77% | |
62 Neutral | $1.09B | -25.95 | -10.08% | ― | 1.93% | -43.22% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
55 Neutral | $238.15M | -43.34 | -12.36% | ― | -26.85% | -93.91% | |
55 Neutral | $697.49M | -11.36 | -6.37% | ― | 2.95% | -228.28% | |
52 Neutral | $435.98M | -52.83 | -6.94% | ― | 92.56% | 85.10% |
* Technology Sector Average
DGII
Digi International
54.05
27.75
105.51%
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LTRX
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NTGR
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12.21%
Digi International Corporate Events
Business Operations and StrategyExecutive/Board Changes
Digi International Grants Performance-Based Equity Awards to Executives
Positive
Mar 5, 2026
On February 27, 2026, Digi International’s compensation committee approved supplemental, performance-based equity awards for two senior executives under its 2021 Omnibus Incentive Plan, tying stock unit vesting to multi-year operational and ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.