Internet of Things (IoT) services provider Digi International (DGII) announced that it has acquired remote monitoring and industrial controls solutions company Ctek Inc. The terms of the deal have not been disclosed so far.
Following the news release, shares of Digi declined 1% to close at $19.82 in Tuesday’s trading session.
The acquisition of Ctek will enable Digi to offer its customers both battery and hardwired options for the control and monitoring of critical infrastructure. Further, Ctek’s wide portfolio of customers will give Digi a foothold in a rapidly increasing market.
The General Manager and Vice-President of Infrastructure Management for Digi International, Brian Kirkendall, said, “The addition of Ctek’s blue-chip customer base and user-focused platform positions Digi to expand our portfolio of purpose-built Industrial IoT solutions. This strategic move marks another significant step toward enabling the intelligent edge for our customers.” (See Digi stock chart on TipRanks)
Last month, Piper Sandler analyst Harsh Kumar reiterated a Buy rating on the stock with a price target of $29, which implies upside potential of 46.3% from current levels.
The analyst said, “We believe Digi remains significantly undervalued relative to peers, as investors do not appreciate the ARR growth story or the software businesses. The company trades at 2.1x our calendar 2021 sales estimate, well below the peer group trading at 4.5x.”
Consensus among analysts is a Strong Buy based on 3 unanimous Buys. The average Digi price target of $26.50 implies upside potential of 33.7% from current levels.
Shares of the company have gained 87.5% over the past year.