📊 DGII Key Takeaways
Is Digi International Inc. (DGII) a Good Investment?
DGII demonstrates strong operational efficiency with 63.2% gross margins and exceptional 30% free cash flow conversion, supported by conservative leverage (0.21x D/E). However, revenue stagnation (0.0% YoY growth) and critically low returns on equity (3.5%) and assets (2.4%) indicate the company is a mature, cash-generative business failing to deploy its substantial $974M asset base efficiently.
Digi International shows solid fundamental quality in profitability and cash generation, with strong gross margins and very high free cash flow conversion relative to revenue. However, the latest period shows no top-line growth, and the balance sheet, while not heavily levered, still carries only moderate liquidity and relatively thin interest coverage. Overall, the business looks fundamentally stable and improved, but not strong enough on growth quality to justify a more aggressive rating.
Digi International Inc. Key Strengths (DGII)
- Exceptional gross margins of 63.2% and strong operating margins of 13.2% demonstrate pricing power and operational excellence
- Outstanding free cash flow generation: $76M with 30% FCF margin indicates high-quality, sustainable cash earnings
- Conservative balance sheet with 0.21x debt-to-equity ratio and 5.3x interest coverage provides financial stability
- Strong gross margin of 62.4% supports resilience and pricing power
- Free cash flow generation is robust at $35.17M with a 28.7% FCF margin
- Net income and diluted EPS grew sharply year over year despite flat revenue
DGII Stock Risks: Digi International Inc. Investment Risks
- Zero revenue growth (0.0% YoY) signals business stagnation with no organic expansion trajectory
- Asset inefficiency is critical: only 3.5% ROE and 2.4% ROA despite $974M asset base indicates poor capital deployment
- Weak liquidity position with 0.77x quick ratio and minimal cash ($31.7M) against $143M long-term debt presents short-term vulnerability
- Revenue was flat year over year, raising concern about underlying demand and growth durability
- Interest coverage of 2.6x leaves limited cushion if profitability softens or rates remain elevated
- Quick ratio of 0.90x suggests liquidity is adequate but not especially strong
Key Metrics to Watch
- Revenue growth in coming periods - sustainability of current trend is fundamental concern
- Return on equity and asset utilization improvements - whether capital base is being deployed more efficiently
- Free cash flow allocation - whether excess cash is reinforcing balance sheet or being distributed away
- Revenue growth and organic demand recovery
- Interest coverage and operating margin sustainability
Digi International Inc. (DGII) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 30.0% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments.
DGII Profit Margin, ROE & Profitability Analysis
DGII vs Technology Sector: How Digi International Inc. Compares
How Digi International Inc. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Digi International Inc. Stock Overvalued? DGII Valuation Analysis 2026
Based on fundamental analysis, Digi International Inc. has mixed fundamental signals relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Digi International Inc. Balance Sheet: DGII Debt, Cash & Liquidity
DGII Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Digi International Inc.'s revenue has grown significantly by 44% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.67 reflects profitable operations.
DGII Revenue Growth, EPS Growth & YoY Performance
DGII Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q2 2026 | $104.5M | $10.5M | $0.28 |
| Q1 2026 | $103.9M | $10.1M | $0.27 |
| Q3 2025 | $105.2M | $9.7M | $0.26 |
| Q2 2025 | $104.5M | $940.0K | $0.03 |
| Q1 2025 | $103.9M | -$3.1M | $-0.08 |
| Q3 2024 | $105.2M | $6.7M | $0.18 |
| Q2 2024 | $107.7M | $940.0K | $0.03 |
| Q1 2024 | $106.1M | -$3.1M | $-0.08 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Digi International Inc. Dividends, Buybacks & Capital Allocation
DGII SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Digi International Inc. (CIK: 0000854775)
📋 Recent SEC Filings
| Date | Form | Document | Action |
|---|---|---|---|
| Jun 9, 2026 | 4 | xslF345X06/form4-06092026_080601.xml | View → |
| Jun 4, 2026 | 4 | xslF345X06/form4-06042026_090658.xml | View → |
| May 28, 2026 | 4 | xslF345X06/form4-05292026_010535.xml | View → |
| May 14, 2026 | 4 | xslF345X06/form4-05142026_080522.xml | View → |
| May 13, 2026 | 4 | xslF345X06/form4-05142026_010547.xml | View → |
❓ Frequently Asked Questions about DGII
What is the AI rating for DGII?
Digi International Inc. (DGII) has a Combined AI Grade of B from Claude (B) and ChatGPT (B) with 78% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are DGII's key strengths?
Claude: Exceptional gross margins of 63.2% and strong operating margins of 13.2% demonstrate pricing power and operational excellence. Outstanding free cash flow generation: $76M with 30% FCF margin indicates high-quality, sustainable cash earnings. ChatGPT: Strong gross margin of 62.4% supports resilience and pricing power. Free cash flow generation is robust at $35.17M with a 28.7% FCF margin.
What are the risks of investing in DGII?
Claude: Zero revenue growth (0.0% YoY) signals business stagnation with no organic expansion trajectory. Asset inefficiency is critical: only 3.5% ROE and 2.4% ROA despite $974M asset base indicates poor capital deployment. ChatGPT: Revenue was flat year over year, raising concern about underlying demand and growth durability. Interest coverage of 2.6x leaves limited cushion if profitability softens or rates remain elevated.
What is DGII's revenue and growth?
Digi International Inc. reported revenue of $253.2M.
Does DGII pay dividends?
Digi International Inc. does not currently pay dividends.
Where can I find DGII SEC filings?
Official SEC filings for Digi International Inc. (CIK: 0000854775) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is DGII's EPS?
Digi International Inc. has a diluted EPS of $0.60.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is DGII's fundamental grade?
Based on our AI fundamental analysis in June 2026, Digi International Inc. has a B grade with 78% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is DGII stock overvalued or undervalued?
Valuation metrics for DGII: ROE of 3.5% (sector avg: 22%), net margin of 9.1% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
What is DGII's AI grade for 2026?
Our dual AI analysis gives Digi International Inc. a combined B grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is DGII's free cash flow?
Digi International Inc.'s operating cash flow is $77.1M, with capital expenditures of $1.1M. FCF margin is 30.0%.
How does DGII compare to other Technology stocks?
Vs Technology sector averages: Net margin 9.1% (avg: 18%), ROE 3.5% (avg: 22%), current ratio 1.11 (avg: 2.5).