Digerati Technologies (DTGI) AI Stock Analysis

• Market Cap: $2.04M
• Dividend Yield: N/A
• Average Volume (3M): 787.38K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.04
• Revenue Growth: -1.41%
• EPS Growth: 70.60%
• Country: US
• Employees: 78
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): N/A
• Shares Outstanding: 179,734,440
• 10 Day Avg. Volume: 367,688
• 30 Day Avg. Volume: 787,379
• PEG Ratio: 0.03
• Price to Book (P/B): -0.21
• Price to Sales (P/S): 0.11
• P/FCF Ratio: 11.47
• Enterprise Value/Market Cap: 4.65
• Enterprise Value/Revenue: 0.62
• Enterprise Value/Gross Profit: 0.94
• Enterprise Value/Ebitda: 1.11
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 43 Neutral
• Price Target: $0.01 ▲(10.00% Upside)
• Action: Reiterated Date: 02/27/26
• Date: Action: Reiterated 02/27/26

The score is primarily held down by a highly stressed balance sheet (negative equity) and sharply declining revenue, which outweigh recent improvements in profitability and positive free cash flow. Technical indicators also lean bearish with the price below key moving averages and negative MACD, while valuation metrics offer limited support due to a negative P/E and no dividend yield.

Positive Factors

Recurring revenue model

Digerati sells subscription and usage-based communications and managed services to businesses, creating predictable recurring revenue. This model supports steady cash inflows, customer lifetime value growth through seat expansion, and better planning for capex and network investments over a multi-month horizon.

High gross and EBITDA margins

Very strong gross and EBITDA margins indicate scalable service economics and pricing power on core offerings. High margins provide a durable buffer to absorb customer churn or rising carrier costs, helping sustain profitability and fund reinvestment even if revenue fluctuates in the medium term.

Improving cash generation

Recent positive operating and free cash flow, with strong FCF growth, shows the company can convert earnings to cash. That enhances near-term financial flexibility to pay down debt, fund strategic initiatives, or invest in growth without immediate external financing, improving sustainability over months.

Negative Factors

Negative shareholders' equity

A negative equity base reflects accumulated deficits and a highly stressed balance sheet, reducing capital flexibility. It increases the company's reliance on external financing, heightens creditor and covenant risk, and constrains the ability to pursue investments or absorb shocks over the medium term.

Sharp revenue decline

A steep, persistent revenue contraction erodes scale and undermines the sustainability of fixed-cost absorption and service margins. Continued declines make it harder to maintain network investments, retain staff, and monetize recurring models, raising execution risk over the next several quarters.

Operating profit remains negative

Core operating losses indicate the business still struggles to generate earnings from its primary services; reported net profits appear supported by below-operating-line items. Dependence on non-operating gains is not durable and leaves profitability vulnerable if those items dissipate.

Digerati Technologies Business Overview & Revenue Model

Company Description

Digerati Technologies, Inc., through its subsidiaries, provides Internet-based telephony products and services through its cloud application platform and session-based communication network in the United States. The company offers Internet broadband, fiber, mobile broadband, and cloud WAN solutions; cloud communication services, including fully hosted IP/PBX, mobile applications, Voice over Internet Protocol (VoIP) transport, SIP trunking, call center applications, auto attendant, voice and web conferencing, call recording, messaging, voicemail to email conversion, integrated mobility applications, and customized VoIP services; and remote network monitoring, data backup, and disaster recovery services, as well as enterprise-class data and connectivity solutions, such as cloud WAN (wide area network) or software-defined WAN, fiber, mobile broadband, and Ethernet over copper services. It primarily serves small to medium-sized enterprise customers and other resellers. The company was formerly known as ATSI Communications Inc. and changed its name to Digerati Technologies, Inc. in March 2011. Digerati Technologies, Inc. was founded in 1993 and is headquartered in San Antonio, Texas.

How the Company Makes Money

Digerati Technologies generates revenue through a subscription-based model, where businesses pay recurring fees for access to its cloud communication services. Key revenue streams include VoIP services, broadband internet, and unified communications as a service (UCaaS). The company also earns from the sale and installation of communication equipment and software licenses associated with its offerings. Digerati's growth is further supported by strategic acquisitions of complementary businesses that expand its customer base and enhance its service portfolio. Partnerships with technology providers and resellers also play a crucial role in extending its market reach and driving sales.

Digerati Technologies Financial Statement Overview

Summary

Mixed fundamentals. Income statement shows a return to profitability with strong gross and EBITDA margins, but revenue is contracting sharply and EBIT remains negative, raising durability concerns. The balance sheet is a major weakness with negative equity and meaningful debt, limiting flexibility. Cash flow has improved to positive operating and free cash flow, but consistency remains a risk given prior periods.

Income Statement

TTM (Trailing-Twelve-Months) results show a return to profitability (net margin ~11.5%) with strong gross margin (~65.6%) and very strong EBITDA margin (~55.7%). However, revenue is shrinking sharply (TTM revenue growth about -32.5%), and operating profit remains weak (negative EBIT in TTM), suggesting profitability is being supported by items below operating income and/or non-operating factors rather than durable core operating leverage.

Balance Sheet

The balance sheet is highly stressed: stockholders’ equity is negative across periods (TTM about -$9.45M), indicating accumulated deficits and limited financial flexibility. Debt remains meaningful (TTM total debt about $7.5M), and the negative equity base makes leverage risk harder to underwrite. Overall, capitalization is the key weakness despite debt coming down materially versus prior years.

Cash Flow

Cash generation has improved: TTM operating cash flow is positive (~$0.68M) and free cash flow is also positive (~$0.38M), with strong TTM free-cash-flow growth (~80%). That said, cash conversion is still modest relative to reported earnings (free cash flow is ~56% of net income in TTM), and the business has a track record of negative operating and free cash flow in earlier years, so consistency remains a watch item.

Breakdown	TTM	Jul 2025	Jul 2024	Oct 2023	Jul 2022	Jul 2021
Income Statement
Total Revenue	15.37M	22.76M	29.96M	31.62M	24.15M	12.42M
Gross Profit	10.08M	13.91M	15.12M	20.34M	14.81M	7.28M
EBITDA	8.56M	9.60M	567.00K	5.90M	597.00K	-9.99M
Net Income	1.76M	-811.00K	-12.64M	-8.29M	-8.01M	-16.68M
Balance Sheet
Total Assets	95.00K	91.00K	36.56M	38.37M	41.69M	16.52M
Cash, Cash Equivalents and Short-Term Investments	35.00K	37.00K	489.00K	924.00K	1.51M	1.49M
Total Debt	7.52M	7.59M	61.01M	47.78M	42.13M	12.36M
Total Liabilities	9.54M	11.76M	81.34M	69.28M	67.50M	33.37M
Stockholders Equity	-9.45M	-11.67M	-39.09M	-27.61M	-23.76M	-16.14M
Cash Flow
Free Cash Flow	384.00K	213.00K	-1.68M	-3.66M	-2.23M	-1.12M
Operating Cash Flow	681.00K	510.00K	-1.68M	-3.22M	-1.96M	-708.00K
Investing Cash Flow	-297.00K	-297.00K	0.00	-436.00K	-12.88M	-10.80M
Financing Cash Flow	-308.00K	-665.00K	1.24M	3.07M	14.87M	12.31M

Digerati Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CXDO	67 Neutral	$174.55M	41.45	7.87%	―	12.91%	222.63%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
UCL	56 Neutral	$64.11M	8.10	29.12%	―	-2.61%	85.42%
KORE	55 Neutral	$90.33M	-1.35	―	―	0.06%	55.55%
IQST	45 Neutral	$8.76M	-0.69	-79.86%	―	43.19%	-63.65%
DTGI	43 Neutral	$2.04M	-0.42	―	―	-1.41%	70.60%