Digi International Inc (DGII) stock analysis

P/E below its 5-year median

Digi International's P/E of 44.0 is below its own 5-year median of 55.0.

P/E above the industry

Digi International's P/E of 44.0 is above the Computer and Office Equipment median of 25.3.

EV/EBITDA above its 5-year median

Digi International's EV/EBITDA of 30.9 is above its 5-year median of 23.6.

P/B below the industry

Digi International's price-to-book of 3.07 is below the Computer and Office Equipment median of 4.20.

Trading above fair value

The share price of $55.43 is above our fair value estimate of $42.03.

Margin of safety under 20%

The price is 31.9% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 3.5% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 26.0% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 14.2% over the last twelve months, against a 5-year average of 37.1% a year.

Growing faster than the industry

Revenue grew 20.3% over the last twelve months; the Computer and Office Equipment median is 11.3%.

Guidance lowered

Digi International lowered its fiscal 2026 Revenue growth outlook on Aug 5, 2026.

Gross margin improving

Gross margin was 63.8% over the last twelve months, against 62.2% a year earlier.

Return on equity under 15%

Return on equity was 7.5% over the last twelve months and averaged 4.4% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 7.8%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Digi International's return on equity of 7.5% is below the Computer and Office Equipment median of 7.5%.

Earnings grew over 5 years

Net income grew 37.1% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 9.6% over the last twelve months, against a 5-year average of 5.7%.

Net margin above the industry

Digi International's net margin of 9.6% is above the Computer and Office Equipment median of 4.0%.

Low debt

Debt is 15.8% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 16.4% five years ago to 15.8%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 128% of total debt.

Interest well covered

Operating income covers interest expense 8.9 times.

Short-term assets cover short-term debts

Current assets are 1.13 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 5.78; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Digi International has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.