On August 20, 2026, Digi International Inc DGII shares fell 3.2% to a current price of $73.70. The stock has experienced significant volatility over the past year, with a 52-week range of $32.76 to $86.84.
- GF Value™ verdict: The current price is $73.70, while the GF Value™ is estimated at $36.63, indicating the stock is 101.2% overvalued.
- GF Score™: The stock has a GF Score™ of 80/100, which suggests it has strong overall performance metrics.
- Most notable signal: Insiders have sold $11.2 million worth of shares over the past 12 months, with no buying activity reported.
Is DGII Overvalued or Undervalued?
According to the GF Value™, Digi International Inc is significantly overvalued, with a current price of $73.70 compared to the estimated fair value of $36.63. This represents a substantial 101.2% premium over its intrinsic value. The GF Value™ is GuruFocus' proprietary estimate of the stock's intrinsic value, which is derived from a combination of historical trading multiples, past business growth, and projections for future performance. Given the considerable gap between the market price and GF Value™, there may be a lack of margin of safety for potential investors.
The significant overvaluation raises concerns about potential risks associated with holding DGII at its current price level. If the market corrects itself to align with the GF Value™, investors may see a decline in stock price. Such a scenario might not only impact returns but could also signal underlying weaknesses in the company's fundamentals that may not be immediately apparent.
How Does DGII's Valuation Compare to Its History?
| Metric | Current | Historical |
|---|---|---|
| P/E (TTM) | 58.4x | 52.4x |
| Forward P/E | 23.2x | N/A |
Digi International's current P/E ratio of 58.4x is notably above its 5-year median P/E of 52.4x, indicating that the stock is trading at a higher valuation compared to its historical levels. The forward P/E of 23.2x suggests a potential decrease in valuation expectations moving forward, yet it does not align with the GF Value™ assessment, which indicates the stock is overvalued overall.
What Does DGII's GF Score™ Tell Us?
The GF Score™ is a comprehensive measure that assesses a company's financial strength, profitability, growth potential, valuation, and momentum. With a GF Score™ of 80/100, Digi International demonstrates strong overall performance, particularly in its growth and profitability metrics, while it ranks lower in valuation.
| Metric | Rating |
|---|---|
| GF Score™ | 80 |
| Financial Strength | 8/10 |
| Profitability | 8/10 |
| Growth | 9/10 |
| Valuation | 1/10 |
| Momentum | 9/10 |
The strong scores in financial strength, profitability, and growth reveal that Digi International is performing well operationally. However, the valuation rank of 1/10 suggests that investors are currently paying a premium that may not be justified by the company’s fundamentals. This disconnect between valuation and other performance metrics could be a red flag for potential investors.
What Are Gurus and Insiders Doing with DGII?
Currently, there are 8 gurus holding Digi International stock, with 3 adding to their positions and 4 trimming their holdings in recent quarters. This mixed activity indicates a lack of consensus among institutional investors regarding the stock's future prospects. The insider selling of $11.2 million worth of shares over the past 12 months without any buying activity raises further concerns about the company's outlook, suggesting that insiders may not be confident in the stock's current valuation.
The combination of insider selling and mixed guru activity signals caution for potential investors, as it suggests that those closest to the company may not see the stock as a worthwhile investment at current levels. This trend further emphasizes the notion of overvaluation highlighted by the GF Value™ assessment.
What This Means for Investors
Based on the GF Value™ analysis, Digi International Inc appears to be significantly overvalued at its current price of $73.70, especially in light of the estimated fair value of $36.63. The lack of insider buying and the mixed sentiment from gurus indicate that potential risks may outweigh opportunities at this time. Investors should exercise caution and consider the insights provided by the GF Value™ and other metrics before making any decisions.
For more detailed insights, visit the Digi International Inc DGII stock page, and explore additional resources on the GF Value™ page.
Frequently Asked Questions
What is DGII's GF Score™?
Digi International has a GF Score™ of 80/100, indicating strong overall performance in key areas.
Is DGII overvalued or undervalued?
DGII is currently overvalued, with a GF Value™ of $36.63 compared to the market price of $73.70.
What is DGII's P/E ratio?
The P/E ratio for DGII is 58.4x, which is above its 5-year median P/E of 52.4x, indicating higher valuation levels.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
