Fact based stock research
Digi International (NasdaqGS:DGII)

US2537981027

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Digi International stock research in summary

digi.com

ANALYSIS: With an Obermatt Combined Rank of 9 (worse than 91% compared with investment alternatives), Digi International (Communications Equipment, USA) shares have lower financial characteristics compared with similar stocks. Shares of Digi International are low in value (priced high) with a consolidated Value Rank of 27 (worse than 73% of alternatives) and show below-average growth (Growth Rank of 25) but are safely financed (Safety Rank of 52), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 9, is a sell recommendation based on Digi International's financial characteristics. As the company Digi International's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 27) and low growth (Obermatt Growth Rank of 25), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 52) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	27
Growth Rank	25
Safety Rank	52
Combined Rank	9

Country	USA
Industry	Communications Equipment
Index	NASDAQ
Size class	Medium

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Digi International

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	31	45	37	27
GROWTH
GROWTH	71	95	43	25
SAFETY
SAFETY	50	85	52	52
SENTIMENT
SENTIMENT	n/a	94	92	^new
360° VIEW
360° VIEW	n/a	96	78	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Digi International is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	31	45	37	27
GROWTH
GROWTH	71	95	43	25
SAFETY
SAFETY	50	85	52	52
COMBINED
COMBINED	39	90	37	9

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Digi International the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 27 (worse than 73% compared with alternatives), Digi International shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Digi International. Price-to-Profit (also referred to as price-earnings, P/E) is 50 which means that the stock price compared with what market professionals expect for future profits is lower than for 50% of comparable companies, indicating a good value concerning Digi International's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 64, which means that the stock price is lower as regards to invested capital than for 64% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 77% of alternatives (only 23% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 27, is a hold recommendation based on Digi International's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	38	38	30	23
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	45	70	62	50
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	63	66	64	64
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	31	45	37	27

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Digi International; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 25 (better than 25% compared with alternatives), Digi International shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Digi International. Sales Growth has a below market rank of 33, which means that, currently, professionals expect the company to grow less than 67% of its competitors. The same is valid for Capital Growth, with a rank of 13, and Profit Growth, with a rank of 29. Currently, professionals expect the company to grow its profits less than 71% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 59, which means that the stock returns have recently been above 59% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 25, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Digi International, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	47	55	61	33
PROFIT GROWTH
PROFIT GROWTH	21	92	45	29
CAPITAL GROWTH
CAPITAL GROWTH	n/a	97	46	13
STOCK RETURNS
STOCK RETURNS	82	67	27	59
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	71	95	43	25

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Digi International.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 52 (better than 52% compared with alternatives), the company Digi International has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Digi International is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Digi International. Leverage is at a rank of 67, meaning the company has a below-average debt-to-equity ratio. It has less debt than 67% of its competitors. Liquidity is also good at a rank of 67, meaning the company generates more profit to service its debt than 67% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 27, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 73% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 52 (better than 52% compared with alternatives), Digi International has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Digi International. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Digi International and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	69	62	49	67
REFINANCING
REFINANCING	35	59	30	27
LIQUIDITY
LIQUIDITY	55	72	58	67
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	50	85	52	52

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Digi International and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	91	87	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	80	78	^new
MARKET PULSE
MARKET PULSE	n/a	72	67	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	94	92	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Digi International.
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