Digi International price target lowered to $40 from $46 at Roth MKM

Roth MKM analyst Scott Searle lowered the firm’s price target on Digi International to $40 from $46 but keeps a Buy rating on the shares. The company’s Q4 earnings beat was moderated by a FY24 reset on a weaker console or data center outlook and cellular gateway transition from a one-time hardware sale to recurring models, the analyst tells investors in a research note. The firm adds however that following a 30% decline since late September, shares now trade at less than 10-times enterprise value to expected 2024 EBITDA, which is a “deep discount for a historic leader”.