# Digi International (DGII.US)

Canonical: https://gigainvestors.com/s/DGII

Analysis as of: 2026-10-16T07:27:59.671Z. Financial observations: FY1996–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $71.75 per share; close as of 2026-10-15.

Estimated value: low $19.00 per share, central $21.56 per share, high $24.96 per share. Buy at or below the central value $21.56 per share. Valuation as of 2026-10-16T07:27:59.671Z; scenarios are not confidence intervals.

Expected annual return: 5.0% at the stated quote. About 5.0% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 2 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 2

- Years with a net loss: 0

- Operating margin variation: 0.57×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.05×

- FY2018: 0.01×

- FY2019: 0.04×

- FY2020: 0.04×

- FY2021: 0.03×

- FY2022: 0.10×

- FY2023: 0.11×

- FY2024: 0.11×

- FY2025: 0.13×

- LTM to Jun 2026: 0.14×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 10.4%

- ROIC, second-lowest year: 6.1%

- Typical minus recent gross margin: -8.1 pp

- Typical gross margin (annual median): 54.9%

- Recent gross margin (lower of latest and 3-year median): 62.9%

- Years with nonpositive capital: 0

- Capital spending / revenue: 0.7%

- ROIC including acquisitions, ten-year median: 7.4%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 10.3%

- FY2018: 1.5%

- FY2019: 8.3%

- FY2020: 6.1%

- FY2021: 6.5%

- FY2022: 10.5%

- FY2023: 12.8%

- FY2024: 13.6%

- FY2025: 11.5%

- LTM to Jun 2026: 15.1%

### economics: pass

- Owner earnings / net income, 5-yr: 2.25×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $265M

- Net income, five-year total: $118M

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -1.2 pp

- Working capital / revenue, change between three-year averages: -8.3 pp

- Working capital / revenue, final three-year average: 21.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 2.80×

- FY2022: 2.84×

- FY2023: 2.20×

- FY2024: 2.39×

- FY2025: 1.77×

### management: fail

- Historical market-dollar context (not the management verdict): 2017 to 2025 (8 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 10.3% vs 12.8%

- Per-share earnings: 0.35 to 0.67 (three-year endpoint medians)

- five-year and ten-year diluted share growth both above threshold

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 4.1%

- Ordinary dilution, 5-year annual growth: 5.0%

- Market cap gain: $1.1B

- Cumulative retained earnings: $138M

- Diluted shares, 10-year annual growth: 4.1%

- Diluted shares, 5-year annual growth: 5.0%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 8.7%

- Per-share value change: $0.33

- Per-share value, starting three-year median: $0.35

- Per-share value, ending three-year median: $0.67

- Buybacks concentrated in cheaper years (correlation): 0.21

- Average buyback yield: 0.4%

- Buyback history: 7 years

- Debt-funded buybacks: Yes

- Acquisition spending: $696M

- Cumulative net income, 10 years: $164M

- ROIC, first three-year median: 10.3%

- ROIC, last three-year median: 12.8%

Chart: Earnings per share; fiscal year observations.

- FY2016: $0.64

- FY2017: $0.35

- FY2018: $0.06

- FY2019: $0.35

- FY2020: $0.28

- FY2021: $0.31

- FY2022: $0.54

- FY2023: $0.67

- FY2024: $0.61

- FY2025: $1.08

### accounting: pass

- Sloan accruals: -7.3%

- Receivables to sales index (DSRI): 0.90×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 14.2%

- Earnings backed by cash: Yes

- Operating cash / earnings: 2.65×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 1.17×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -3.1%

- FY2017: 2.0%

- FY2018: 1.2%

- FY2019: -4.8%

- FY2020: -4.9%

- FY2021: -7.6%

- FY2022: -2.1%

- FY2023: -1.4%

- FY2024: -7.4%

- FY2025: -7.3%

## Holders

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Andrew Adams](https://gigainvestors.com/MPF): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 16.3% a year for ten years · "Digi International (DGII) Benefited from Faster Than Expected Recurring Services Revenue" (finance.yahoo.com, Feb 2026) · sales +17.7%

Story as of 2026-10-16T09:58:37.909Z; price observation 2026-10-15.

Price needs cash profits to grow 16.3% a year for ten years

- 2026-02-19: Digi International (DGII) Benefited from Faster Than Expected Recurring Services Revenue ([finance.yahoo.com](https://finance.yahoo.com/news/digi-international-dgii-benefited-faster-124114016.html))

- 2026-04-28: Digi International (DGII) Surged on Strong Earnings Report ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/digi-international-dgii-surged-strong-142004500.html))

- 2026-08-06: Digi International (DGII) Strengthens on Record Revenue ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/digi-international-dgii-strengthens-record-123944719.html))

### Sales · FY2025–2026

sales +17.7%; source https://www.sec.gov/Archives/edgar/data/854775/000085477525000026/dgii-20250930.htm; observed 2025-11-21.

- FY2017: $182M 

- FY2018: $227M 

- FY2019: $254M 

- FY2020: $279M 

- FY2021: $309M 

- FY2022: $388M 

- FY2023: $445M 

- FY2024: $424M 

- FY2025: $430M 

- FY2026: $506M 

### Gross margin · FY2026

gross margin 63.8%; source https://www.sec.gov/Archives/edgar/data/854775/000085477525000026/dgii-20250930.htm; observed 2025-11-21.

- FY2017: 48.0% 

- FY2018: 45.2% 

- FY2019: 46.8% 

- FY2020: 51.6% 

- FY2021: 54.0% 

- FY2022: 55.7% 

- FY2023: 56.7% 

- FY2024: 58.9% 

- FY2025: 62.9% 

- FY2026: 63.8% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in communication equipment; annual sales are USD 430.2 million.

- Source: https://www.sec.gov/Archives/edgar/data/854775/000085477525000026/dgii-20250930.htm (filed 2025-11-21); FY2025: revenue 430221000; grossProfit 270677000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); DGII.US: Digi International Inc. provides business and mission-critical Internet of Things (IoT) connectivity products, services, and solutions in the United States, Europe, the Middle East, Africa, and internationally. It operates through IoT Products & Services, and IoT Solutions segments. The company offers cellular routers for mission-critical wireless connectivity; cellular modules to embed cellular communications abilities into the products to deploy and manage intelligent and secure cellular connected products; console servers to provide secure and remote access to network equipment in data centers and at edge locations; and radio frequency products, including embedded wireless modules, off-the-shelf gateways, modems, and adapters under the Digi XBee brand. It also provides embedded system products under the Digi Connect, and ConnectCore 	brands; and infrastructure management products comprising serial servers, which offers serial port-to-Ethernet integration of devices into wired Ethernet networks; and universal serial bus solutions. In addition, it provides Digi Remote Manager and Lighthouse, a recurring revenue cloud-based service that offers a secure environment for customers to manage connected device deployment and network devices; SmartSense by Digi for monitoring wirelessly the temperature of food and other perishable or sensitive goods, monitoring facilities or pharmacies by tracking the completion of operating tasks by employees, and quality control and incident management in food service, healthcare, and transportation/logistics industries; and Ventus for MNaaS solutions. Further, the company provides professional services, such as site planning, implementation management, application development, and customer training; data plan subscriptions; and enhanced technical support services, as well as Digi Wireless Design Services. Digi International Inc. was incorporated in 1985 and is headquartered in Hopkins, Minnesota.

### Why customers stay

Margins ranged from 56.7% to 62.9% during 2023–25; it earns 10.4% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-21); FY2023: grossProfit / revenue = 56.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-21); FY2024: grossProfit / revenue = 58.9%.

- Source: https://www.sec.gov/Archives/edgar/data/854775/000085477525000026/dgii-20250930.htm (filed 2025-11-21); FY2025: grossProfit / revenue = 62.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-21); 10-year return on capital observations [[2017,0.10307261032656105],[2018,0.014537342230082803],[2019,0.08348978129392176],[2020,0.0605485051469172],[2021,0.06524420096304605],[2022,0.10496914368578468],[2023,0.1283052833921],[2024,0.13599919961250648],[2025,0.11470175255780338],[2026,0.150961026100571]]; median 0.10402087700617287. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 3 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-21); FY2016: growth capex 0; upkeep 2729000; owner earnings 18593000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-21); FY2017: growth capex 0; upkeep 1773000; owner earnings 13090000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-21); FY2018: growth capex 0; upkeep 1842000; owner earnings 12573000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-21); FY2019: growth capex 0; upkeep 9335000; owner earnings 14019000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-21); FY2020: growth capex 0; upkeep 899000; owner earnings 26811000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-21); FY2021: growth capex 0; upkeep 2257000; owner earnings 28986000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-21); FY2022: growth capex 0; upkeep 1974000; owner earnings 54981000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-21); FY2023: growth capex 0; upkeep 4345000; owner earnings 54381000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-21); FY2024: growth capex 0; upkeep 2226000; owner earnings 53896000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/854775/000085477525000026/dgii-20250930.htm (filed 2025-11-21); FY2025: growth capex 0; upkeep 2630000; owner earnings 72419000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-21); Dividend observations: [[2016,0],[2017,0],[2018,0],[2019,0],[2020,6967000],[2021,2120000],[2022,4343000],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 2.8% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); DGII.US SharesStats.PercentInsiders = 2.7560000000000002 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 16.3% yearly over ten years; actual growth was 19.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-11-21); Ten-year compound average after fade. Initial solved rate 0.22373829844646875. Price 71.75; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.31501962183374954 → FY2025 1.9189432682371022. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $9.15 per share

- 2016-11: $13.40 per share

- 2016-12: $13.75 per share

- 2017-01: $13.05 per share

- 2017-02: $12.30 per share

- 2017-03: $11.90 per share

- 2017-04: $12.40 per share

- 2017-05: $9.55 per share

- 2017-06: $10.15 per share

- 2017-07: $10.45 per share

- 2017-08: $9.20 per share

- 2017-09: $10.60 per share

- 2017-10: $10.40 per share

- 2017-11: $10.25 per share

- 2017-12: $9.55 per share

- 2018-01: $10.35 per share

- 2018-02: $10.45 per share

- 2018-03: $10.30 per share

- 2018-04: $11.50 per share

- 2018-05: $11.70 per share

- 2018-06: $13.20 per share

- 2018-07: $13.50 per share

- 2018-08: $13.45 per share

- 2018-09: $13.45 per share

- 2018-10: $11.60 per share

- 2018-11: $11.84 per share

- 2018-12: $10.09 per share

- 2019-01: $11.86 per share

- 2019-02: $13.20 per share

- 2019-03: $12.67 per share

- 2019-04: $12.87 per share

- 2019-05: $10.89 per share

- 2019-06: $12.68 per share

- 2019-07: $13.13 per share

- 2019-08: $12.78 per share

- 2019-09: $13.62 per share

- 2019-10: $14.42 per share

- 2019-11: $17.84 per share

- 2019-12: $17.72 per share

- 2020-01: $15.80 per share

- 2020-02: $13.24 per share

- 2020-03: $9.54 per share

- 2020-04: $11.35 per share

- 2020-05: $11.13 per share

- 2020-06: $11.65 per share

- 2020-07: $12.12 per share

- 2020-08: $13.62 per share

- 2020-09: $15.63 per share

- 2020-10: $14.73 per share

- 2020-11: $17.16 per share

- 2020-12: $18.90 per share

- 2021-01: $18.47 per share

- 2021-02: $23.36 per share

- 2021-03: $18.99 per share

- 2021-04: $17.87 per share

- 2021-05: $18.96 per share

- 2021-06: $20.11 per share

- 2021-07: $20.68 per share

- 2021-08: $21.98 per share

- 2021-09: $21.02 per share

- 2021-10: $21.55 per share

- 2021-11: $21.53 per share

- 2021-12: $24.57 per share

- 2022-01: $22.34 per share

- 2022-02: $20.08 per share

- 2022-03: $21.52 per share

- 2022-04: $18.92 per share

- 2022-05: $22.10 per share

- 2022-06: $24.22 per share

- 2022-07: $28.49 per share

- 2022-08: $33.11 per share

- 2022-09: $34.57 per share

- 2022-10: $40.33 per share

- 2022-11: $42.47 per share

- 2022-12: $36.55 per share

- 2023-01: $33.99 per share

- 2023-02: $33.37 per share

- 2023-03: $33.68 per share

- 2023-04: $30.16 per share

- 2023-05: $35.95 per share

- 2023-06: $39.39 per share

- 2023-07: $41.93 per share

- 2023-08: $33.38 per share

- 2023-09: $27.00 per share

- 2023-10: $25.18 per share

- 2023-11: $23.54 per share

- 2023-12: $26.00 per share

- 2024-01: $24.31 per share

- 2024-02: $29.56 per share

- 2024-03: $31.93 per share

- 2024-04: $30.66 per share

- 2024-05: $24.36 per share

- 2024-06: $22.93 per share

- 2024-07: $27.30 per share

- 2024-08: $29.46 per share

- 2024-09: $27.53 per share

- 2024-10: $28.97 per share

- 2024-11: $33.22 per share

- 2024-12: $30.23 per share

- 2025-01: $31.25 per share

- 2025-02: $30.54 per share

- 2025-03: $27.83 per share

- 2025-04: $27.20 per share

- 2025-05: $32.41 per share

- 2025-06: $34.86 per share

- 2025-07: $32.61 per share

- 2025-08: $34.72 per share

- 2025-09: $36.46 per share

- 2025-10: $36.68 per share

- 2025-11: $41.83 per share

- 2025-12: $43.29 per share

- 2026-01: $43.07 per share

- 2026-02: $48.82 per share

- 2026-03: $48.20 per share

- 2026-04: $56.04 per share

- 2026-05: $66.80 per share

- 2026-06: $74.95 per share

- 2026-07: $69.72 per share

- 2026-08: $74.94 per share

- 2026-09: $76.23 per share

- 2026-10: $71.75 per share

## Annual estimated value (USD per share)

- FY2016: low $9.60 per share, central $10.25 per share, high $11.10 per share

- FY2017: low $7.98 per share, central $8.54 per share, high $9.28 per share

- FY2018: low $7.08 per share, central $7.76 per share, high $8.67 per share

- FY2019: low $8.46 per share, central $9.21 per share, high $10.20 per share

- FY2020: low $9.09 per share, central $10.12 per share, high $11.48 per share

- FY2021: low $11.66 per share, central $12.66 per share, high $14.00 per share

- FY2022: low $11.83 per share, central $13.35 per share, high $15.38 per share

- FY2023: low $13.28 per share, central $15.02 per share, high $17.35 per share

- FY2024: low $15.83 per share, central $17.95 per share, high $20.76 per share

- FY2025: low $16.19 per share, central $18.37 per share, high $21.28 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/854775/000085477525000026/dgii-20250930.htm); period 2025-09-30, filed 2025-11-21.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.