<div id="readability-page-1"><div><p>Digi International (DGII) has quietly outperformed the broader market this year, with the stock up roughly 50% year to date and about 17% over the past 3 months, drawing fresh attention to its IoT-focused business model.</p> <p>See our latest analysis for Digi International.</p> <p>That kind of run, capped by a recent 1 month share price return of just over 10 percent and a current share price around 43 dollars and 86 cents, suggests momentum is still building as investors warm to Digi International's IoT growth story and reassess the risk reward trade off after a strong 5 year total shareholder return.</p> <p>If Digi International's move has you rethinking where growth could come from next, it might be worth exploring high growth tech and AI stocks as a potential companion for your watchlist.</p> <p>But after such a strong multiyear run and a premium valuation score, is Digi International still trading at a genuine discount to its intrinsic worth, or is the market already pricing in the next leg of IoT-driven growth?</p> <h2>Most Popular Narrative Narrative: 7.3% Undervalued</h2> <p>Against a last close of 43 dollars and 86 cents, the most followed narrative pegs Digi International's fair value slightly higher, framing the recent rally as only part of the story.</p> <blockquote> <p><em>The accelerating transition of customers to Digi's subscription based and recurring revenue solutions, combined with higher attach rates on IoT products such as cellular routers and infrastructure management devices, points to ongoing double digit annual recurring revenue (ARR) growth and improved profit margins, boosting both revenue stability and long term earnings.</em></p> </blockquote> <p>Read the complete narrative.</p> <p>Curious how steady but unspectacular revenue growth can still support a richer valuation multiple and higher margins over time? The narrative leans on a specific profit mix shift, a multi year earnings ramp and a future earnings multiple that together do the heavy lifting on fair value. Want to see exactly how those moving parts stack up, and what they imply for Digi International's share price path from here?</p> <p><strong>Result: Fair Value of $47.33 (UNDERVALUED)</strong></p> <p>Have a read of the narrative in full and understand what's behind the forecasts.</p> <p>However, slower recurring revenue uptake or prolonged regional demand softness, particularly in APAC and Europe, could delay Digi International's earnings ramp and pressure valuation assumptions.</p> <p>Find out about the key risks to this Digi International narrative.</p> <h2>Another Angle on Valuation</h2> <p>Step away from narratives and Digi International suddenly looks pricey. Its price to earnings ratio sits near 40 times, well above both peers at 23 times and the Communications industry at 30.7 times, and even further from a 25.2 times fair ratio, raising the question of how much future growth is already baked in.</p> <p>See what the numbers say about this price — find out in our valuation breakdown.</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/dc945a63-451c-4283-a003-f31cab992c7c/chart/pe-multiple-vs-industry?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/dc945a63-451c-4283-a003-f31cab992c7c/chart/pe-multiple-vs-industry"/><figcaption>NasdaqGS:DGII PE Ratio as at Dec 2025</figcaption></figure><h2> Build Your Own Digi International Narrative</h2> <p>If you see the story differently or want to dig into the numbers yourself, you can build a fresh narrative in just minutes, Do it your way.</p> <p>A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Digi International.</p> <h2>Ready for your next investment move?</h2> <p>Before your next trade, put Simply Wall Street's screener to work and upgrade your watchlist with fresh, data driven ideas you do not want to miss.</p> <ul> <li>Seize potential mispricings by scanning these 914 undervalued stocks based on cash flows that strong cash flow analysis suggests the market may be overlooking.</li> <li>Tap into cutting edge innovation with these 25 AI penny stocks that could benefit as artificial intelligence reshapes entire industries.</li> <li>Strengthen your income strategy by targeting these 13 dividend stocks with yields &gt; 3% that marry attractive yields with solid underlying businesses.</li> </ul> <p><em> This article by Simply Wall St is general in nature. <strong>We provide commentary based on historical data     and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.</strong> It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your     financial situation. We aim to bring you long-term focused analysis driven by fundamental data.     Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.     Simply Wall St has no position in any stocks mentioned.</em></p><div><p>Mobile Infrastructure for Defense and Disaster</p><p>The next wave in robotics isn't humanoid. Its fully autonomous towers delivering 5G, ISR, and radar in under 30 minutes, anywhere.</p><p>Get the investor briefing before the next round of contracts</p><p><span>Sponsored On Behalf of CiTech</span></p></div></div></div>

DGII

<p>Digi International (DGII) has seen a strong share price increase, up 50% year-to-date, driven by its IoT-focused business model. Despite a premium valuation, it is considered 7.3% undervalued with a fair value of $47.33. The company benefits from a shift to subscription-based revenue and IoT product growth, though risks include slower revenue uptake in APAC and Europe. Its PE ratio is high compared to peers, suggesting future growth may be priced in.</p>

Is Digi International (DGII) Still Undervalued After Its Strong Recent Share Price Run?