GET DAILY SIGNALSWhy Is Digi International (DGII) Stock Down -5.30% Today?
Key Takeaways
- Shares of DGII fell 5.30%, or $3.10, to $55.34 in early Friday trading, extending the previous session's 12.72% collapse.
- The primary catalyst remains the company's fiscal 2027 outlook: revenue growth of just 10% to 15% against the 24% Digi International delivered in fiscal 2026.
- Secondary pressure came from a Piper Sandler price-target cut to $67 from $76 and management's warning on rising component costs, "most notably memory."
- The stock has now lost its 200-day moving average near $64 and is testing the $52.80 low set during Thursday's session, with the long uptrend structurally broken.
- News Significance Score: 45/100 — A material guidance reset at a premium-multiple company, but the price reaction is only about 2.4 times the stock's typical daily move.
- Traders are watching whether $52.80 holds and whether the pending $130 million Disruptive Technologies acquisition closes on schedule by November 30.
- Investors can dig deeper into Price Targets, Earnings, and Forecast data on the dedicated pages.
- For systematic signal generation across thousands of symbols, explore Trending AI Robots.
Opening Summary
Digi International Inc. (DGII) is a Hopkins, Minnesota-based provider of industrial Internet of Things connectivity hardware, software and managed subscription services, selling embedded modules, routers, console servers and its SmartSense monitoring platform to transportation, retail, healthcare and industrial customers. In early trading Friday, the stock changed hands at $55.34, down $3.10 or 5.30%, from Thursday's close of $58.44. The move confirms a second straight session of downside and extends a selloff triggered Wednesday evening, when the company beat fiscal fourth-quarter estimates but guided fiscal 2027 growth to roughly half of the prior year's pace.
Earnings Beat Overshadowed by a Sharper Growth Deceleration
The catalyst is unambiguous. Digi International reported record fiscal fourth-quarter revenue of $143.3 million, up 25% year over year and ahead of the roughly $140.3 million consensus, with adjusted earnings of $0.78 per share beating estimates by two cents. Operating margin expanded 400 basis points to 16.5%, adjusted EBITDA rose 43% to $42 million, and annualized recurring revenue climbed 30% to $197 million.
None of that mattered once the outlook landed. Management guided fiscal 2027 revenue growth of 10% to 15% and adjusted EBITDA growth of 12.5% to 17.5%, a steep deceleration from the 24% and 37% delivered in fiscal 2026. First-quarter adjusted EPS of $0.71 to $0.75 also sits below the $0.78 just reported. The company pointed to an "evolving global trade framework" and rising input costs — memory in particular, squeezed by AI data-center demand — as headwinds to gross margin, which already slipped 20 basis points to 63.7%.
The market's reaction reflects a valuation reset rather than a verdict on the quarter. At Wednesday's $66.96 close, Digi traded at more than 50 times forward earnings; a growth rate cut in half leaves little room for that multiple, which is why the earnings-driven move has extended into a second session.
Analyst Actions Reinforce the De-Rating
Piper Sandler cut its target to $67 from $76 while keeping a Neutral rating, arguing the results and guidance suggest investors may have already seen "peak growth and peak multiple." The broker also flagged tougher year-over-year comparisons and a premium valuation relative to hardware and data-center software peers when measured against organic growth. Consensus remains a Moderate Buy with an average target in the low-to-mid $80s, but the direction of travel for targets is now clearly lower — a dynamic that keeps sellers in control while the stock searches for a floor.
Market Context and Trading Activity
Volume has been the story of the week. Thursday's turnover of roughly 883,000 shares was more than four times the 60-session average near 199,000, and Friday's early action has drawn further participation. The move is company-specific at its core, though it landed in a soft tape for rate-sensitive small caps: the Russell 2000 fell 1.66% on Thursday as Treasury yields rose, a backdrop that amplifies multiple compression in high-growth industrials.
Technically, the damage is significant. The stock gapped from $66.96 to an open near $53.09 on Thursday and closed at $58.44, leaving an unfilled earnings gap and putting price decisively below both the 50-day average near $72.50 and the 200-day average near $64. Momentum readings are firmly negative. The $52.80 intraday low is now the reference support; a close back above $64 would be the first credible sign the breakdown is failing.
News Significance Score
On a scale where 0 means no meaningful news and a normal move, and 100 means transformative news and an extreme, rare move, this event scores 45 out of 100. The verified news is genuinely material: a company that just grew 24% guided to half that pace, and management identified specific cost and trade headwinds, prompting a sell-side target cut. Judged against Digi International's roughly $2.1 billion market value, that is a significant repricing of expectations.
The price behavior, though, is not extreme by this stock's own standards. Friday's 5.30% decline is about 2.4 times the typical 2.22% absolute daily move of the past 60 sessions, and moves of similar or larger size occurred five times in that window. Heavy volume supports the upper end of that range, but the combination of real fundamental news with a merely elevated — not historic — move lands the score in the middle of the scale.
What Comes Next for DGII
Attention shifts to execution against the new, lower bar. Digi International expects to close its $130 million cash acquisition of Norway-based Disruptive Technologies by November 30, pending regulatory approval, with roughly $9 million of incremental adjusted EBITDA targeted by fiscal 2028. How quickly that business converts to the SmartSense subscription model will shape the recurring-revenue trajectory.
The next hard data point is the fiscal first-quarter report, expected in late January or early February, when investors will test whether the $140 million to $144 million revenue guide and 63% to 65% gross margin range hold against memory cost inflation. Analysts currently model fiscal 2027 revenue near $600 million. Key swing factors include memory pricing stability, the durability of 15%-plus ARR growth, and whether the premium multiple compresses further before value buyers step in.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
DGII in upward trend: price may jump up because it broke 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 30 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 79%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator entered the oversold zone -- be on the watch for DGII's price rising or consolidating in the future. That's also the time to consider buying the stock or exploring call options.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 7 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 54 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 75%.
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 32 of the 43 cases the stock turned lower in the days that followed. This puts the odds of success at 74%.
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 31 (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 Price Growth Rating for this company is 50 (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 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 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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General Information
a provider of communications adapters that enable open systems, server-based applications
Industry TelecommunicationsEquipment
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