GET DAILY SIGNALSWhy Is Digi International (DGII) Stock Down -16.04% Today?
Key Takeaways
- Digi International (DGII) shares fell roughly 16% after reporting fiscal fourth-quarter results, driven by a sharp deceleration in its forward guidance.
- The company beat on Q4 — adjusted EPS of $0.78 versus a $0.76 consensus and record revenue of $143.3 million — but the outlook disappointed investors.
- Fiscal 2027 revenue growth guidance of 10% to 15% marked a steep step-down from the 24% growth just delivered, triggering the earnings-driven sell-off.
- Rising component costs, particularly memory, and an "evolving global trade framework" added to the cautious tone from management.
- The stock fell far more sharply than the broader market, reflecting a company-specific guidance reset rather than sector-wide weakness.
- Traders are now watching whether the pending Disruptive Technologies acquisition closes and how first-quarter results track against the reset bar.
- For additional context on this name, explore Price Targets, Earnings, and Forecast pages for DGII.
- To see how AI-driven strategies are positioning across the market right now, explore Trending AI Robots.
Opening Summary
Digi International Inc. (DGII), a Hopkins, Minnesota-based provider of business- and mission-critical Internet of Things (IoT) connectivity products, services, and solutions, saw its stock plunge more than 16% in Thursday's session. The shares traded around $56.22, down from a prior close of $66.96, reflecting a decline of roughly 16.04%. The move came on the heels of the company's fiscal fourth-quarter and full-year earnings report, in which a solid quarterly beat was overshadowed by fiscal 2027 guidance that signaled a meaningful slowdown in growth.
Soft Fiscal 2027 Guidance Resets Expectations
The primary catalyst behind the decline was forward guidance, not the reported quarter itself. For the fiscal fourth quarter ended September 30, Digi posted adjusted earnings of $0.78 per share, topping the consensus estimate of $0.76, while revenue climbed 25% year over year to a record $143.3 million, ahead of the roughly $140 million analysts expected. Adjusted EBITDA rose 43% to $42 million, and annualized recurring revenue (ARR) reached $197 million, up 30%.
However, investors focused on what lies ahead. Management guided fiscal 2027 revenue growth to a range of 10% to 15% — a sharp step-down from the 24% growth delivered in fiscal 2026 — alongside adjusted EBITDA growth of 12.5% to 17.5% and ARR growth of at least 15%. First-quarter revenue guidance of $140 million to $144 million and adjusted EPS of $0.71 to $0.75 also bracketed, or came in slightly below, Wall Street's expectations. For a stock that had rallied strongly over the past year, the reset to a meaningfully slower growth trajectory was enough to spark a broad market reaction and heavy selling.
Rising Component Costs and Trade Uncertainty
Compounding the guidance disappointment were management's comments on input costs and the operating environment. Executives pointed to rising component costs — with particular pressure in memory — and an "evolving global trade framework" as headwinds that are extending demand planning horizons and squeezing margins. Gross margin slipped to 63.7% in the quarter, down 20 basis points from a year earlier, and first-quarter gross margin was guided toward the low-to-mid-60s range. These factors reinforced the cautious tone and gave investors additional reason to de-risk positions despite otherwise strong operating results.
Market Context and Trading Activity
The price action was clearly company-specific rather than a reflection of broad market sentiment. The roughly 16% decline far exceeded any move in the major indices, indicating that the sell-off was tied to Digi's own outlook rather than sector or macroeconomic pressures. The drop also unwound much of the prior session's 2.94% gain and pushed the shares well off their recent highs, breaking below several near-term technical levels in the process. The magnitude of the move underscored how richly the market had been pricing the company's growth narrative heading into the report.
What Comes Next for DGII
Looking ahead, investors will be watching several key factors. The pending $130 million cash acquisition of Norway-based Disruptive Technologies, expected to close before the end of November 2026, is a focal point, particularly given that the company's guidance assumes the deal's contribution. How quickly the integration progresses and whether it helps sustain the recurring-revenue story will matter. Market participants will also monitor component-cost trends, gross margin trajectory, and whether first-quarter results land in line with the newly lowered bar. Risks include continued supply-chain and trade headwinds, integration execution, and the possibility that the decelerating growth profile keeps a lid on valuation multiples.
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DGII in upward trend: price expected to rise as it breaks its lower Bollinger Band on November 05, 2026
DGII may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In 32 of 38 cases where DGII's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are 84%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where DGII's RSI Oscillator exited the oversold zone, 16 of 23 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 70%.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 6 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a +7.68% 3-day Advance, the price is estimated to grow further. Considering data from situations where DGII advanced for three days, in 237 of 323 cases, the price rose further within the following month. The odds of a continued upward trend are 73%.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on November 02, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on DGII as a result. In 52 of 72 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 72%.
The Moving Average Convergence Divergence Histogram (MACD) for DGII turned negative on November 02, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 43 similar instances when the indicator turned negative. In 33 of the 43 cases the stock turned lower in the days that followed. This puts the odds of success at 77%.
DGII moved below its 50-day moving average on October 30, 2026 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for DGII crossed bearishly below the 50-day moving average on November 06, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 8 of 14 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 57%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where DGII declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 68%.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 9 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 19 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 81, placing this stock better than average.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is 57 (best 1 - 100 worst), indicating steady price growth. DGII’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 74 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.501) is normal, around the industry mean (5.210). P/E Ratio (49.000) is within average values for comparable stocks, (3.688). Projected Growth (PEG Ratio) (0.981) is also within normal values, averaging (0.778). Dividend Yield (0.000) settles around the average of (0.067) among similar stocks. P/S Ratio (5.330) is also within normal values, averaging (11.937).
The Tickeron SMR rating for this company is 78 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
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a provider of communications adapters that enable open systems, server-based applications
Industry TelecommunicationsEquipment
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