Digi International (DGII) AI Stock Analysis

• Market Cap: $1.21B
• Dividend Yield: N/A
• Average Volume (3M): 145.63K
• Price to Earnings (P/E): 28.9
• Beta (1Y): 1.32
• Revenue Growth: -4.47%
• EPS Growth: 195.28%
• Country: US
• Employees: 805
• Sector: Technology
• Sector Strength: 98
• Industry: Communication Equipment
• EPS (TTM): 0.51
• Shares Outstanding: 37,066,696
• 10 Day Avg. Volume: 136,535
• 30 Day Avg. Volume: 145,630
• PEG Ratio: 0.61
• Price to Book (P/B): 2.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 11.61
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 0.75
• Enterprise Value/Gross Profit: 5.09
• Enterprise Value/Ebitda: 4.45
• 1Y Price Target: $33.25
• Price Target Upside: 1.96% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

• Rating: 71 Outperform
• Price Target: $36.00 ▲(10.40%Upside)

Digi International scores well overall due to its strong financial performance, characterized by solid profitability, efficient cash flow generation, and low leverage. Positive earnings call insights further support the stock. However, the neutral technical analysis and moderate valuation, along with macroeconomic risks, temper the overall score.

Digi International Business Overview & Revenue Model

Company Description

Digi International Inc. (DGII) is a leading global provider of business and mission-critical Internet of Things (IoT) connectivity products and services. The company operates in the technology and communications sector, offering a wide range of products including embedded systems, wireless communication modules, and routers. Digi International serves various industries such as industrial, transportation, healthcare, and energy, providing solutions that help businesses connect, monitor, and manage their devices and data securely and efficiently.

How the Company Makes Money

Digi International generates revenue through the sale of its IoT connectivity products and services. Key revenue streams include the sale of hardware such as embedded systems and wireless communication modules, which are integrated into customer products to enable connectivity. The company also earns income from its software and services segment, which includes subscription-based IoT management and cloud-based services that offer device monitoring, data analytics, and remote management capabilities. Additionally, Digi International benefits from strategic partnerships that expand its market reach and enhance its product offerings. The company's focus on innovation and customer-centric solutions plays a significant role in driving its earnings.

Digi International Financial Statement Overview

Summary

Digi International displays strong financial health with solid profitability, efficient cash generation, and low financial risk. The income statement, balance sheet, and cash flow all reflect operational efficiency and financial stability, though the slight revenue decline requires attention.

Income Statement

Digi International shows a strong income statement with consistent profitability improvements. The TTM gross profit margin is 59.85%, and the net profit margin is 10.06%, indicating efficient cost management and a healthy bottom line. However, the revenue growth has slowed, with a slight decline of 1.28% compared to the previous year. EBIT and EBITDA margins are robust at 13.11% and 19.12%, respectively, highlighting operational efficiency.

Balance Sheet

The company's balance sheet is strong with a low debt-to-equity ratio of 0.14, reflecting conservative leverage. Return on equity is solid at 6.96%, demonstrating effective use of shareholders' funds. The equity ratio stands at 77.48%, suggesting a stable financial structure with a substantial equity base. Overall, the balance sheet indicates low financial risk and strong capital management.

Cash Flow

Digi International's cash flow statements indicate strong cash generation capabilities. The free cash flow grew by 29.61% year-over-year, and the operating cash flow to net income ratio is a robust 2.55, indicating strong operational cash flow relative to net income. Furthermore, the free cash flow to net income ratio is an impressive 2.49, underscoring the company's ability to convert earnings into cash efficiently.

Breakdown	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	424.05M	444.85M	388.23M	308.63M	279.27M
Gross Profit	249.91M	252.20M	216.29M	166.66M	143.97M
EBITDA	71.34M	84.11M	72.17M	38.77M	33.38M
Net Income	22.50M	24.77M	19.38M	10.37M	8.41M
Balance Sheet
Total Assets	815.08M	835.53M	853.89M	619.53M	528.68M
Cash, Cash Equivalents and Short-Term Investments	27.51M	31.69M	34.90M	152.43M	54.13M
Total Debt	137.39M	220.91M	15.52M	66.80M	79.67M
Total Liabilities	234.04M	295.04M	352.38M	147.01M	157.18M
Stockholders Equity	581.03M	540.49M	501.51M	472.52M	371.50M
Cash Flow
Free Cash Flow	80.87M	32.41M	35.77M	55.47M	33.58M
Operating Cash Flow	83.09M	36.75M	37.74M	57.72M	34.48M
Investing Cash Flow	3.00K	-4.34M	-349.53M	-21.36M	-137.00M
Financing Cash Flow	-89.05M	-34.50M	192.78M	62.24M	63.60M

Digi International Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 32.61
• 50DMA: Negative
• 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 Negative. The current price of 32.61 is below the 20-day moving average (MA) of 33.82, below the 50-day MA of 33.72, and above the 200-day MA of 31.29, indicating a neutral trend. The MACD of -0.16 indicates Positive momentum. The RSI at 41.41 is Neutral, neither overbought nor oversold. The STOCH value of 21.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DGII.

Digi International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HLIT	75 Outperform	$986.20M	15.37	16.36%	―	24.14%	16.17%
DGII	71 Outperform	$1.21B	28.85	7.30%	―	-4.47%	195.28%
NTGR	65 Neutral	$722.18M	30.34	12.97%	―	0.68%	―
COMM	63 Neutral	$1.78B	―	17.08%	―	-19.10%	93.30%
Sector *	62 Neutral	$35.05B	6.90	-11.57%	2.06%	6.28%	-15.90%
VSAT	58 Neutral	$1.97B	―	-12.00%	―	5.50%	48.79%
AIOT	56 Neutral	$565.49M	―	-17.72%	―	168.61%	79.82%

Digi International Corporate Events

Digi International Board Restructures for IoT Focus

Digi International announced the retirement of Sally J. Smith from its Board of Directors, effective after the 2025 Annual Meeting of Stockholders, and the nomination of two new members, Valerie Heusinkveld and Allison West Hughes, to the Board. This strategic move aims to leverage their extensive expertise in technology, finance, and marketing to enhance Digi’s focus on IoT advancements and recurring revenue-based solutions, strengthening its industry position and stakeholder value.