Digi International Inc Dossier - Source-backed chat

Digi International Inc

DGIINASDAQ

SectorInformation Technology

IndustryCommunication Equipment

Beta (adjusted)0.98

Intrinsic Value $53.30median of 6 methods · middle span $33-$88based on filings through 30 Jun 2026

Market Price $73.39Price as of 1 Oct 2026

OvervaluedIntrinsic value is 27% below the market price

−50% · IV below pricenear fair value ±15%IV above price · +50%

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Market Cap $2.8B

Enterprise Value $2.9B

Shares Outstanding 38.8M diluted

Moat Rating None

Next Earnings Date11 Nov 2026

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

Digi International is successfully transitioning from a pure-play hardware provider to a high-margin, software-enabled IoT solutions leader. This shift is highlighted by rapid growth in Annualized Recurring Revenue (ARR), which reached $184 million in Q2 FY26 (representing 36% of TTM revenue), and record gross margins of 64%. Strategic acquisitions like Jolt and Particle are expanding the company's addressable market and edge-to-cloud capabilities, positioning it to capture double-digit growth in the fragmented industrial IoT space.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets5 analysts · as of 18 Aug 2026

Low · most bearish analyst$76.00

Mean target$85.40

High · most bullish analyst$90.00

Street targets sit above today's price; our intrinsic value sits below it. Different horizons, different questions.

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 18 Sep 2026

Scenarios · 12-month scenario targetsAnchored at research date

Bear CaseDownside scenario

$76.0020%

Macroeconomic headwinds slow down industrial IoT deployments, and integration challenges with recent acquisitions lead to margin compression. Deleveraging is delayed, and hardware sales decline faster than software recurring revenue can offset.

Base CaseCentral scenario

$85.4050%

Matches the consensus mean

Steady execution of the 'solutions-first' strategy with ARR growing at a 25% YoY pace. Gross margins stabilize in the low-to-mid 60s, and the company successfully deleverages its balance sheet using robust operating cash flows.

Bull CaseUpside scenario

$90.0030%

Accelerated adoption of edge-to-cloud IoT solutions and rapid integration of Particle and Jolt drive ARR past $200 million ahead of schedule. High-margin software subscriptions expand gross margins toward 66%, leading to significant operating leverage and multiple expansion.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

Strong transition to high-margin recurring revenue models, with ARR growing 50% YoY to $184 million in Q2 FY26.
Record-high gross margins of 64% and robust operating cash flow generation ($41 million in Q2 FY26 alone).
Successful inorganic expansion through strategic acquisitions (Particle, Jolt) that deepen edge-to-cloud capabilities.

Key Investment Risks

Integration risks associated with multiple recent acquisitions, which could disrupt operations or dilute margins.
Exposure to macroeconomic cyclicality and supply chain disruptions in the hardware and semiconductor components space.
Intense competition from larger, more established players in the highly fragmented industrial IoT market.

Thesis Invalidation Triggers

A significant deceleration in ARR growth below 15% YoY.
Gross margins falling consistently below 60% due to pricing pressure or rising component costs.
Failure to successfully integrate Particle, resulting in write-downs of acquired intangible assets.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

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Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.