DGII stock forecast, quote, news & analysis
Digi International Inc is a Minnesota corporation that provides business and mission-critical Internet of Things (IoT) connectivity products and services... Show more
Digi International (DGII) Stock Analysis: Record ARR Growth and AI-Powered IoT Expansion Underpin the Pullback
Key Takeaways
- Digi International (DGII) shares have declined approximately 9% over the past 30 days, retreating from roughly $75 to around $68 amid insider selling and broader market rotation.
- The company reported record Q2 FY2026 results in May, including $131 million in quarterly revenue, $184 million in annualized recurring revenue (ARR), and a 64% gross margin — all all-time highs.
- July saw the global launch of the ConnectCore 95 SMARC development kit, integrating on-device AI, Wi-Fi 6E, and bundled cloud services into a single module targeting medical, industrial, and retail OEMs.
- Wall Street analysts maintain a consensus Strong Buy rating with an average 12-month price target near $72, implying roughly 6% upside from current levels.
- The upcoming Q3 FY2026 earnings report on August 5, 2026, represents the next major catalyst, with management guiding for revenue between $130 million and $134 million.
Current Market Snapshot
Digi International stock has experienced a notable pullback over the trailing 30-day period, slipping from the mid-$70s in late June to the upper-$60s by late July 2026. The decline interrupted a powerful multi-month rally that had pushed shares up more than 90% over the prior year. Trading volume has remained relatively steady, and the stock continues to hold above its 200-day moving average of approximately $55. Despite the near-term weakness, the broader analyst community has held firm on bullish ratings, and the sell-off appears tied more to insider transaction activity and profit-taking than to any deterioration in the underlying business narrative.
Digi International (DGII) Business Overview and Competitive Position
Digi International is a Minnesota-based global provider of business- and mission-critical Internet of Things (IoT) connectivity products, services, and solutions. Founded in 1985, the company operates through two primary segments: IoT Products & Services — which encompasses embedded wireless modules, cellular routers, gateways, console servers, and the Digi Remote Manager device management platform — and IoT Solutions, which includes the SmartSense condition-based monitoring business and managed network-as-a-service offerings. Digi serves customers across industrial, healthcare, transportation, retail, and energy sectors. A defining characteristic of Digi's strategy is its accelerating transition toward recurring revenue: ARR reached $184 million at the end of Q2 FY2026, up 50% year-over-year, driven by both organic subscription growth and the successful integrations of Jolt and Particle. With a market capitalization of approximately $2.5 billion and a gross margin that hit an all-time record of 64%, Digi has positioned itself as a consolidator and platform play in the fragmented industrial IoT landscape.
Recent Developments Driving DGII
Several developments have shaped DGII's stock narrative in recent weeks. On July 1, 2026, Digi announced the global availability of its ConnectCore 95 SMARC system-on-module development kit, built on the NXP i.MX 95 processor. The module incorporates an NXP eIQ Neutron NPU delivering up to 2 TOPS of on-device AI performance, tri-band Wi-Fi 6E, Bluetooth 5.4, and five years of bundled cloud services — including over-the-air updates, fleet monitoring, and device provisioning — all included in the module price. The product directly addresses compliance requirements under the EU Cyber Resilience Act, giving OEMs a turnkey path to secure, regulation-ready connected devices.
On the sentiment front, a Zacks Investment Research upgrade to Strong Buy in early July reflected upward revisions in earnings estimates. Q3 FY2026 guidance calls for adjusted EPS of $0.65–$0.68 on revenue of $130–$134 million, and full-year fiscal 2026 projections target ARR growth of 25% and adjusted EBITDA growth of 23–26%. Offsetting this optimism, however, was a wave of insider selling reported in mid-July, with senior executives collectively offloading more than $11 million in shares. The transactions, while not uncommon following a period of strong price appreciation, raised questions about near-term valuation and contributed to the stock's downward pressure. Analysts at Stephens and Craig Hallum have nonetheless reiterated bullish stances, with price targets raised to $75 following the Q2 print.
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2026 Outlook and What Investors Should Watch
Looking ahead, the balance of 2026 presents a mix of catalysts and risks for Digi International. The immediate focus is the Q3 FY2026 earnings release on August 5, 2026, where investors will scrutinize ARR trajectory, margin trends, and the pace of Particle and Jolt integration. Beyond earnings, the commercial ramp of the ConnectCore 95 family — particularly adoption among medical and industrial OEMs navigating EU Cyber Resilience Act compliance — represents a meaningful growth vector. Macroeconomic factors, including potential tariff impacts on hardware components and memory pricing fluctuations, could influence gross margins. Additionally, Digi's acquisition flywheel — management tracks over 400 potential targets — means further M&A activity remains a distinct possibility, with the company targeting $200 million in ARR. On the risk side, elevated valuation multiples (trailing P/E near 57x) leave the stock sensitive to any earnings disappointments or shifts in growth-stock sentiment. The interplay between Digi's demonstrated execution and broader sector rotation will likely define the stock's path through year-end.
Disclaimer
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DGII in upward trend: price rose above 50-day moving average on July 30, 2026
DGII moved above its 50-day moving average on July 30, 2026 date and that indicates a change from a downward trend to an upward trend. In of 40 similar past instances, the stock price increased further within the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on July 29, 2026. You may want to consider a long position or call options on DGII as a result. In of 76 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for DGII just turned positive on July 30, 2026. Looking at past instances where DGII's MACD turned positive, the stock continued to rise in of 44 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where DGII advanced for three days, in of 326 cases, the price rose further within the following month. The odds of a continued upward trend are .
DGII may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In of 247 cases where DGII Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The 10-day RSI Indicator for DGII moved out of overbought territory on July 01, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 44 similar instances where the indicator moved out of overbought territory. In of the 44 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 4 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The 10-day moving average for DGII crossed bearishly below the 50-day moving average on July 20, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 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 .
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 of 62 cases within the following month. The odds of a continued downward trend are .
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is (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 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 77, placing this stock better than average.
The Tickeron Price Growth Rating for this company is (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 (best 1 - 100 worst) indicates that the company is fair valued 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 (3.948) is normal, around the industry mean (6.713). P/E Ratio (61.699) is within average values for comparable stocks, (71.832). Projected Growth (PEG Ratio) (0.981) is also within normal values, averaging (1.219). DGII has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.017). P/S Ratio (5.602) is also within normal values, averaging (13.357).
The Tickeron SMR rating for this company is (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