| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 27 | 54.4x | 17.8x | Bottom tier | |
Growth | 76 | 20.3% | 7.1% | Top tier | |
Quality | 80 | 7.7% | 4.5% | Top tier | |
Safety | 89 | 0.7x | 2.6x | Top tier | |
Capital Return | 22 | — | 2.12% | Bottom tier | |
Momentum | 90 | 140.9% | 2.9% | Top tier | |
Sentiment | 68 | 4 | 3 | Top tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Digi International provides integrated Internet of Things solutions that connect remote assets and enable their monitoring and management, including industrial routers for wells and remote facilities, Opengear servers for data centers, SmartSense solutions for pharmacies, food businesses, and hospitals, and point-of-sale and industrial infrastructure management systems. Its model is based on selling edge and connectivity hardware, then attaching software and services to increase recurring revenue; services represented 36% of the revenue mix in Q3 fiscal 2026, while annual recurring revenue reached $191 million.
In Q3 fiscal 2026, Digi recorded revenue of $138.7 million according to EDGAR filings, up 29% year over year according to the earnings call, compared with $130.7 million in Q2 fiscal 2026. Gross profit was $89.9 million, consistent with a reported gross margin of 64.8%, while net income reached $15.7 million and GAAP earnings per share were $0.40; adjusted earnings per share were $0.75, exceeding analysts' estimates of $0.67.
The business mix showed balanced contributions from products, services, and solutions; higher product volumes and increased solution attachment rates supported recurring revenue, while enterprise deals in Ventus and SmartSense contributed to growth in the solutions segment. Adjusted earnings before interest, taxes, depreciation, and amortization reached $40 million at a record margin of 29.1%, while operating cash flow reached $33 million, up 38% year over year, reflecting earnings growth that outpaced revenue growth.
Automated analysis for informational purposes only — not investment advice.
The analyst consensus rates DGII as “Buy,” with an average price target of $79 and a target range of $75 to $90; the average is below the 52-week range high of $86.84, while the highest target exceeds that high. The wide 52-week range of $33.41 to $86.84 reflects valuation sensitivity to accelerating annual recurring revenue and operating leverage on one hand, and acquisition integration risks, margin-mix volatility, and the supply chain on the other.
Figures in the text are as of 2026-08-31; the live price is shown at the top of the page.
Q3 fiscal 2026 revenue was approximately $138.7 million according to EDGAR and rose 29% year over year according to the earnings call. Growth came from balanced contributions across products, services, and solutions, with higher product volumes and increased attachment of software and services. Enterprise deals in Ventus and SmartSense also supported annual recurring revenue, while Opengear benefited from data center and edge-location activity. Accordingly, the company raised its fiscal 2026 revenue outlook to a range of $529–533 million.
Annual recurring revenue reached a record $191 million in Q3 fiscal 2026. Management expects year-over-year growth of at least 27% and an annualized level of at least $193 million by the end of fiscal 2026. This revenue benefits from attaching solutions to products and from enterprise deals in Ventus and SmartSense. The increase in services to 36% of the revenue mix also helped earnings grow faster than revenue.
Gross profit was $89.9 million at a margin of 64.8%, while net income according to EDGAR reached $15.7 million and earnings per share reached $0.40. On an adjusted basis, the company recorded earnings per share of $0.75 versus analyst estimates of $0.67. Adjusted earnings before interest, taxes, depreciation, and amortization reached $40 million at a record margin of 29.1%. Operating cash flow also increased 38% year over year to $33 million.
DANI stands for Digi Artificial Network Intelligence, and the company introduced it within the Digi Remote Manager platform in Q3 fiscal 2026. The tool allows users to ask natural-language questions about network performance, the status of Digi devices and their connected assets, and available software updates. Digi wants to use it to simplify system management, train new employees, and increase the value derived from its solutions. However, the company is currently integrating DANI to encourage adoption, and management said monetizing it is not the priority at this stage.
Management described its model as a cycle that begins with an acquisition funded by debt, followed by integrating the acquired company, generating cash, and reducing leverage before seeking another opportunity. In Q3 fiscal 2026, operating cash flow reached $33 million, and net debt after cash declined to $81 million. Management reported that the integration of Jolt Software, acquired in fiscal 2025, and Particle, acquired in fiscal 2026, is proceeding in line with targets communicated internally and externally. Using debt instead of issuing shares reduces direct ownership dilution, but it makes successful integration and cash generation essential to sustaining the strategy.
Management noted supply chain challenges that began with memory and then extended to other components, although this prompted some customers to place orders more quickly to secure delivery. It also clarified that the 64.8% margin is not a new baseline and that changes in the product mix could cause volatility of between 200 and 300 basis points over short periods. Direct sales opportunities with hyperscalers remain subject to long and difficult-to-predict cycles, so Digi did not include them in its guidance. In addition, the debt-funded acquisition strategy requires continued successful integration and a reduction in net debt after cash of $81 million.
