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↓Deteriorating
- Consistent Earnings Beat Streak↑Improving
- +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
Digi International Inc. (DGII) Stock Analysis
Breakout setup · Catalyst-Driven edge
Technology · Communication Equipment
Sell if holding. At $78.28, A.R:R is negative (-0.5) — 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 $78.28, A.R:R is negative (-0.5) — 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 58, MACD bullish. Score 6.0/10, moderate confidence.
Passes 6/8 gates (positive momentum, clean insider activity, no SEC red flags, news events none recent, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio. Suitability: aggressive.
Recent developments
updated 2026-10-29Recent 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 2026-10-29T11:08:51Z.
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
2 floor-breakers·1 ceiling hit
Priced at a premium — multiples above sector norms. Needs delivery on growth + margins to justify.static
Technicals below the gate floor. Component breakdown shows what dragged the score down.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. At $78.28, A.R:R is negative (-0.5) — 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 58, MACD bullish. Prior stop was $72.80. Score 6.0/10, moderate confidence.
Analyst target $74.30 reached (−5.1% from $78.28); no take-profit level is published. Prior stop was $72.80. Stop-loss: $72.80.
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 62.1 (forward 25.0). TrendMatrix value score: 3.1/10. 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.