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→Stable
- Consistent Earnings Beat Streak→Stable
- +1 more pillar — see the Why tab for full reasoning
Digi International Inc. (DGII) Stock Analysis
Technology · Communication Equipment
Sell if holding. At $70.30, A.R:R 0.7:1 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 $70.30, A.R:R 0.7:1 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: No clear chart pattern; technical signals are mixed. Score 6.0/10, moderate confidence.
Passes 6/8 gates (clean insider activity, no SEC red flags, news events none recent, earnings proximity 68d clear, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum and favorable risk/reward ratio. Suitability: aggressive.
Recent developments
updated 2026-09-04Recent Developments — Digi International Inc.
Latest news
- NEWS Digi International stock trades up with long-term bullish setup holding above key support - Traders Union — Traders Union positive
- NEWS Digi International stock trades up with long-term bullish setup holding above key support - tradersunion.com — tradersunion.com positive
- NEWS Digi International (DGII) Expected to Announce Earnings on Wednesday - MarketBeat — MarketBeat neutral
- NEWS Zacks Industry Outlook Highlights Cisco Systems, Extreme Networks and Digi International - Yahoo Finance — Yahoo Finance neutral
- NEWS Zacks Industry Outlook Highlights Cisco Systems, Extreme Networks and Digi International - finance.yahoo.com — finance.yahoo.com positive
Generated 2026-09-04T15:07:36Z.
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.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
Rating Breakdown
2 floor-breakers·1 ceiling hit
Momentum below the gate floor. Component breakdown shows what dragged the score down.static
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 $70.30, A.R:R 0.7:1 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: No clear chart pattern; technical signals are mixed. Prior stop was $65.43. Score 6.0/10, moderate confidence.
Take-profit target: $74.30 (+5.8% upside). Prior stop was $65.43. Stop-loss: $65.43.
Concentration risk — Supplier: manufacturer in China; Concentration risk — Supplier: single-sourced suppliers; Thin upside margin: 5.8%.
Digi International Inc. trades at a P/E of 55.3 (forward 22.4). TrendMatrix value score: 3.7/10. Verdict: Sell.
11 analysts cover DGII with a consensus score of 4.1/5. Average price target: $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.