Digi International has delivered four consecutive quarterly earnings beats averaging roughly 6% upside and converts earnings into free cash flow at nearly three times net income, but the stock trades within less than 1% of its near-term resistance target with a forward price-to-earnings multiple of 24.6 times and a price-to-earnings-to-growth ratio of 6.84, leaving the risk/reward firmly unfavorable; two unresolved supply-chain concentration risks add downside that the current geometry does not compensate for.
Thesis pillars
- Stretched Valuation Thin Upside↑Improving
- Supply Chain Concentration Risk↓Deteriorating
- Consistent Earnings Beat Streak↓Deteriorating
- +1 more pillar — see the Why tab for full reasoning
Pillars as of Jul 3, 2026, based on the 10-K filed Nov 21, 2025· older than 90 days
Digi International Inc. (DGII) Stock Analysis
Range Bound setup
Technology · Communication Equipment
Sell if holding. At $72.58, A.R:R 0.3:1 is below the 1.5:1 minimum. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Concentration risk — Supplier: manufacturer in China; Concentration risk — Supplier: single-sourced suppliers.
Digi International provides IoT connectivity products and managed solutions through two segments: IoT Products & Services (cellular routers, embedded modules, console servers for OEMs and enterprises) and IoT Solutions (SmartSense condition monitoring and Ventus... Read more
Sell if holding. At $72.58, A.R:R 0.3:1 is below the 1.5:1 minimum. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Concentration risk — Supplier: manufacturer in China; Concentration risk — Supplier: single-sourced suppliers. Chart setup: RSI 52 mid-range, Bollinger mid-band. Score 6.1/10, moderate confidence.
Passes 5/8 gates (positive momentum, clean insider activity, no SEC red flags, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio and earnings proximity 6d<=7d. Suitability: aggressive.
Recent developments
No fresh coverage since Aug 12, 2026
Recent Developments — Digi International Inc.
Latest news
- NEWS FMR LLC Boosts Digi International Inc (DGII) Stake -- Shares Trade 132% Above GF Value - GuruFocus — GuruFocus Aug 12, 2026 positive
- NEWS Is Digi International (DGII) Fully Valued On Strong Earnings And Higher 2026 Guidance? - simplywall.st — simplywall.st Aug 11, 2026 positive
- NEWS Digi International (DGII) Stock Looks Expensive After Its 308% Five Year Run - Yahoo Finance — Yahoo Finance Aug 7, 2026 negative
- NEWS DGII Looks 104.8% Overvalued on GF Value™ as Growth Outlook Brig - GuruFocus — GuruFocus Aug 5, 2026 negative
- NEWS Digi International (NASDAQ:DGII) Releases Q4 2026 Earnings Guidance - MarketBeat — MarketBeat Aug 5, 2026 neutral
Latest item Aug 12, 2026 · Generated 2026-11-05T11:39:29Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- LOWCustomerone distributor customer13%10-K Item 1: 'We had one distributor customer of Digi's IoT Products & Services segment that represented 13% of consolidated revenue for the twelve months ended September 30, 2025'
- HIGHSuppliermanufacturer in China10-K Item 1A: 'Ventus relies almost exclusively on a manufacturer in China for the production of the hardware it provides to its customers'
- HIGHSuppliersingle-sourced suppliers10-K Item 1: 'We have several single-sourced supplier relationships, either because alternative sources are not available or because the relationship is advantageous to us'
- MEDIUMCustomerfewer than twenty customers10-K Item 1A: 'its business historically has been significantly concentrated on its relationships with fewer than twenty customers'
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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Rating Breakdown
1 floor-breaker·1 ceiling hit
Priced at a premium — multiples above sector norms. Needs delivery on growth + margins to justify.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. At $72.58, A.R:R 0.3:1 is below the 1.5:1 minimum. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Concentration risk — Supplier: manufacturer in China; Concentration risk — Supplier: single-sourced suppliers. Chart setup: RSI 52 mid-range, Bollinger mid-band. Prior stop was $67.50. Score 6.1/10, moderate confidence.
Analyst target: $74.30 (+2.4% upside). Prior stop was $67.50. Stop-loss: $67.50.
Concentration risk — Supplier: manufacturer in China; Concentration risk — Supplier: single-sourced suppliers; Analyst target reached - limited upside remaining.
Digi International Inc. trades at a P/E of 57.6 (forward 23.2). TrendMatrix value score: 3.5/10. Verdict: Sell.
11 analysts rate DGII, with a consensus score of 4.1/5. 5 analysts publish price targets averaging $85.
What does Digi International Inc. do?Digi International provides IoT connectivity products and managed solutions through two segments: IoT Products &...
Digi International provides IoT connectivity products and managed solutions through two segments: IoT Products & Services (cellular routers, embedded modules, console servers for OEMs and enterprises) and IoT Solutions (SmartSense condition monitoring and Ventus managed-network-as-a-service). IoT Solutions ARR was $120 million and IoT Products & Services ARR was $32 million as of September 30, 2025, with 913 employees globally.