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→Stable
- 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
Breakout setup
Technology · Communication Equipment
Sell if holding. At $72.15, A.R:R is negative (-1.0) — price has exceeded the analyst target. 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 $72.15, A.R:R is negative (-1.0) — price has exceeded the analyst target. 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: Golden cross, above all MAs, RSI 63, MACD bullish. Score 5.1/10, moderate confidence.
Passes 6/8 gates (positive momentum, no SEC red flags, news events none recent, earnings proximity 33d clear, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio. Suitability: aggressive.
Recent developments
updated 2026-07-06Recent Developments — Digi International Inc.
Latest news
- NEWS DGII (Digi) posts narrow Q1 2026 EPS beat, shares dip 0.24 percent on muted investor sentiment. - Consensus Beat - Newse — Newser positive
- NEWS Digi International (DGII) Projected to Post Quarterly Earnings on Wednesday - MarketBeat — MarketBeat neutral
- NEWS Should Digi’s Portfolio-Wide FIPS 140-3 Security Upgrade Require Action From Digi International (DGII) Investors? - Sahm — Sahm positive
- NEWS Digi International (DGII) Achieves Compliance in Device Security - GuruFocus — GuruFocus positive
- NEWS Digi International (DGII) Surged on Strong Earnings Report - Yahoo Finance — Yahoo Finance positive
Generated 2026-07-06T06:00:34Z.
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.
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Rating Breakdown
1 floor-breaker
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 $72.15, A.R:R is negative (-1.0) — price has exceeded the analyst target. 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: Golden cross, above all MAs, RSI 63, MACD bullish. Prior stop was $67.10. Score 5.1/10, moderate confidence.
Take-profit target: $74.88 (+3.8% upside). Prior stop was $67.10. Stop-loss: $67.10.
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 63.8 (forward 25.8). TrendMatrix value score: 2.9/10. Verdict: Sell.
12 analysts cover DGII with a consensus score of 4.1/5. Average price target: $72.
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.