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Digi International
(NASDAQ:DGII)
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Rating:70Outperform
Price Target:
$82.00
▲(49.15% Upside)
Action:Reiterated
Date:05/09/26
The score is driven primarily by strong financial fundamentals (notably free cash flow strength and conservative leverage). This is tempered by stretched valuation (P/E ~40), technically overbought conditions (RSI ~81.7), and a mixed latest quarter impacted by a recall despite maintained full-year guidance and a stated path to recovery.
Positive Factors
Strong Free Cash Flow
Sustained FCF at this scale gives the company durable financial flexibility: it can fund R&D, sustain product roadmap investments (hardware + software), support recurring-service rollouts, and absorb short-term disruptions without needing external financing, strengthening strategic optionality.
Negative Factors
Uneven Revenue Growth & Margin Volatility
Inconsistent top-line trends and fluctuating margins reduce visibility into medium-term earnings power. Margin variability limits predictability of free cash flow and complicates scaling investments; sustaining improved profitability will require consistent product mix and supply stability.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Free Cash Flow
Sustained FCF at this scale gives the company durable financial flexibility: it can fund R&D, sustain product roadmap investments (hardware + software), support recurring-service rollouts, and absorb short-term disruptions without needing external financing, strengthening strategic optionality.
Read all positive factors
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 (DGII) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.72B
Dividend YieldN/A
Average Volume (3M)355.53K
Price to Earnings (P/E)62.2
Beta (1Y)1.24
Revenue Growth13.48%
EPS Growth0.69%
CountryUS
Employees805
SectorTechnology
Sector Strength88
IndustryCommunication Equipment
Share Statistics
EPS (TTM)1.16
Shares Outstanding37,702,198
10 Day Avg. Volume292,216
30 Day Avg. Volume355,532
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 Cap0.98
Enterprise Value/Revenue5.60
Enterprise Value/Gross Profit8.83
Enterprise Value/Ebitda26.67
Forecast
1Y Price Target
$70.75Price Target Upside28.68% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)2.45
Revenue Forecast (FY)$516.13M
Digi International Business Overview & Revenue Model
Company Description
Digi International Inc. is a global leader in providing essential Internet of Things (IoT) products, services, and complete solutions for mission-critical business applications. The company operates through two primary divisions: IoT Products & Se...
How the Company Makes Money
Digi International primarily makes money by selling IoT connectivity hardware and associated software/services that support deployment, operation, and management of connected devices.
1) Product (hardware) revenue: A significant portion of revenu...
Digi International Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 12, 2026
Earnings Call Sentiment Neutral
Mixed results: the quarter was materially impacted by a voluntary product recall that drove revenue and margin headwinds, lower procedure volumes and a significant year-over-year decline in net income and adjusted EBITDA. Offsetting positives include strong dietary supplement growth (+19.1%), expansion of the salesforce to ~120 reps, a 16.5% increase in newly trained practitioners (a leading indicator for future revenue), operational actions to restore supply (second shift at Asteria and third-party support), maintained full-year guidance (revenue >$190M, adjusted EBITDA >$38M), and positive operating cash flow. Management frames the recall as temporary and expects procedure revenue to return to growth in the second half of 2026.Positive Updates
Dietary Supplement Revenue Growth
Dietary supplement revenue grew 19.1% year-over-year to $11.0 million in Q1 2026, driven primarily by continued growth of the e-commerce channel. Company expects supplement revenue to grow at a mid- to high single-digit rate for full-year 2026.
Negative Updates
Overall Revenue Decline
Total revenue decreased 8.3% year-over-year to $44.9 million in Q1 2026, driven primarily by a decline in procedure revenue and temporary supply disruptions caused by a voluntary product recall.
Read all updates
Q2-2026 Updates
Positive
Negative
Dietary Supplement Revenue Growth
Dietary supplement revenue grew 19.1% year-over-year to $11.0 million in Q1 2026, driven primarily by continued growth of the e-commerce channel. Company expects supplement revenue to grow at a mid- to high single-digit rate for full-year 2026.
Read all positive updates
Company Guidance
Management reiterated 2026 guidance of revenue above $190.0 million and adjusted EBITDA greater than $38.0 million, while reporting Q1 revenue down 8.3% to $44.9M (procedure revenue down 13.2% to $31.3M, including an estimated $1.7M recall impact; dietary supplement revenue up 19.1% to $11.0M), gross profit margin of 68.9% (vs. 74.3% year‑ago; ~$1.1M incremental recall cost), adjusted EBITDA of $8.7M (19.4% margin), net income of $2.7M and diluted EPS of $0.06 (vs. $15.8M/$0.37 prior year), cash flow from operations of $3.9M and cash & equivalents of $5.3M as of 3/31/26; Asteria produced ~30% of shipped pellets in Q1 (vs. >50% in Q4’25), management expects to fully restore Asteria supply by end of Q2, expects H1 procedure growth to be moderately lower than prior forecasts but a return to growth in H2, and projects dietary supplement revenue growth at a mid‑ to high‑single‑digit rate for 2026.Digi International Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
78
Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 475.06M | 430.22M | 424.05M | 444.85M | 388.23M | 308.63M |
| Gross Profit | 301.41M | 270.68M | 249.91M | 252.20M | 216.29M | 166.66M |
| EBITDA | 99.83M | 84.07M | 71.34M | 84.11M | 75.89M | 31.26M |
| Net Income | 43.24M | 40.80M | 22.50M | 24.77M | 19.38M | 10.37M |
Balance Sheet | ||||||
| Total Assets | 974.23M | 922.65M | 815.08M | 835.53M | 853.89M | 619.53M |
| Cash, Cash Equivalents and Short-Term Investments | 31.74M | 21.90M | 27.51M | 31.69M | 34.90M | 152.43M |
| Total Debt | 153.89M | 179.85M | 137.39M | 220.91M | 258.14M | 66.80M |
| Total Liabilities | 308.27M | 286.57M | 234.04M | 295.04M | 352.38M | 147.01M |
| Stockholders Equity | 665.96M | 636.08M | 581.03M | 540.49M | 501.51M | 472.52M |
Cash Flow | ||||||
| Free Cash Flow | 126.75M | 105.33M | 80.87M | 32.41M | 35.77M | 55.47M |
| Operating Cash Flow | 129.34M | 107.96M | 83.09M | 36.75M | 37.74M | 57.72M |
| Investing Cash Flow | -196.90M | -148.33M | 3.00K | -4.34M | -349.53M | -21.36M |
| Financing Cash Flow | 72.98M | 34.62M | -89.05M | -34.50M | 192.78M | 62.24M |
Digi International Technical Analysis
Positive
54.98
Price Trends
64.86
Positive
57.55
Positive
49.08
Positive
Market Momentum
2.28
Negative
59.88
Neutral
79.90
Neutral
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 54.98 is below the 20-day moving average (MA) of 69.18, below the 50-day MA of 64.86, and above the 200-day MA of 49.08, indicating a bullish trend. The MACD of 2.28 indicates Negative momentum. The RSI at 59.88 is Neutral, neither overbought nor oversold. The STOCH value of 79.90 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
86 Outperform | $1.14B | 18.80 | 28.54% | 4.38% | 11.12% | 9.16% | |
70 Outperform | $2.72B | 62.20 | 6.72% | ― | 13.48% | 0.69% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $1.53B | -38.03 | -10.31% | ― | -27.47% | -181.91% | |
58 Neutral | $586.37M | -28.40 | -4.35% | ― | 22.42% | 64.09% | |
55 Neutral | $244.90M | -32.89 | -8.79% | ― | -17.17% | 23.08% | |
53 Neutral | $577.06M | -15.36 | -7.97% | ― | 3.66% | -200.01% |
* Technology Sector Average
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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.