Digi International Inc. Common Stock (DGII)

FairStock Score: 44/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for businesses that earn high returns on capital and sell at a sensible price. Digi International, at $74.58 on 2026-10-13, is a small industrial IoT connectivity company with 913 employees. Its latest filed quarter, fiscal Q3 2026 ended 2026-06-30, showed revenue of $138.7 million, net income of $15.7 million, and diluted EPS of $0.40, versus revenue of $107.5 million, net income of $10.2 million, and EPS of $0.27 in fiscal Q3 2025. That is excellent recent growth. Full-year FY2025 revenue was $430.2 million with net income of $40.8 million and EPS of $1.08, up from FY2024 revenue of $424.0 million, net income of $22.5 million, and EPS of $0.61, though FY2023 revenue was higher at $444.8 million, so the multi-year sales path is uneven. The balance sheet looks sound: debt-to-equity is 0.17, Piotroski is 8/9, and Altman Z-Score is 6.80. Free cash flow is $136.0 million, a 4.8% yield. But returns are only 7.46% ROE and 5.22% ROCE, suggesting no wide moat. Valuation is the problem. FairStock's P/E is 59.19 and P/B is 4.13, while the Graham Number is $22.63, leaving a -229.56% margin of safety. EV/EBITDA is 25.89 and PEG is 1.10. FairStock calls it a STALWART: profit grew 37.1% a year over five years, revenue 9.0%. I like the improving cash generation and fortress balance sheet, but the price already discounts much success.

In plain English: Digi International makes Internet of Things gear and services that help other companies connect devices reliably. In its latest filed quarter, sales and profits grew strongly, and the balance sheet looks solid. However, at the 2026-10-13 closing price of $74.58, the stock looks expensive compared with the company's profits and accounting value.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q3 2026 10-Q (period ended 2026-06-30) · fiscal Q2 2026 10-Q (period ended 2026-03-31) · fiscal Q1 2026 10-Q (period ended 2025-12-31) · fiscal Q3 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-09-30) · FY2024 10-K (period ended 2024-09-30) · FY2023 10-K (period ended 2023-09-30)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer