Shares of Digi International (DGII) have been strong performers lately, with the stock up 19.5% over the past month. The stock hit a new 52-week high of $70.79 in the previous session. Digi International has gained 61.3% since the start of the year compared to the 23.6% move for the Zacks Computer and Technology sector and the 65.8% return for the Zacks Computer - Networking industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on May 6, 2026, Digi International reported EPS of $0.62 versus consensus estimate of $0.58.
For the current fiscal year, Digi International is expected to post earnings of $2.48 per share on $521.62 in revenues. This represents a 18.1% change in EPS on a 21.25% change in revenues. For the next fiscal year, the company is expected to earn $2.74 per share on $563.15 in revenues. This represents a year-over-year change of 10.48% and 7.96%, respectively.
Valuation Metrics
While Digi International has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Digi International has a Value Score of D. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 28.2X current fiscal year EPS estimates, which is not in-line with the peer industry average of 28.3X. On a trailing cash flow basis, the stock currently trades at 25.7X versus its peer group's average of 22.7X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this is even more important than the company's VGM Score. Fortunately, Digi International currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Digi International passes the test. Thus, it seems as though Digi International shares could still be poised for more gains ahead.
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Digi International Inc. (DGII): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).