DIGI INTERNATIONAL INC (DGII) Stock Fundamental Analysis
NASDAQ:DGII - Nasdaq - US2537981027 - Common Stock - Currency: USD
DGII gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 48 industry peers in the Communications Equipment industry. DGII scores excellent points on both the profitability and health parts. This is a solid base for a good stock. DGII has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year DGII was profitable.
In the past year DGII had a positive cash flow from operations.
Each year in the past 5 years DGII has been profitable.
Each year in the past 5 years DGII had a positive operating cash flow.
1.2 Ratios
DGII's Return On Assets of 5.40% is fine compared to the rest of the industry. DGII outperforms 72.92% of its industry peers.
The Return On Equity of DGII (6.96%) is better than 72.92% of its industry peers.
Looking at the Return On Invested Capital, with a value of 6.24%, DGII is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for DGII is significantly below the industry average of 13.64%.
The 3 year average ROIC (4.84%) for DGII is below the current ROIC(6.24%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.4% | ||
| ROE | 6.96% | ||
| ROIC | 6.24% |
ROA(3y)2.67%
ROA(5y)2.25%
ROE(3y)4.11%
ROE(5y)3.36%
ROIC(3y)4.84%
ROIC(5y)3.62%
1.3 Margins
DGII has a Profit Margin of 10.07%. This is amongst the best in the industry. DGII outperforms 83.33% of its industry peers.
DGII's Profit Margin has improved in the last couple of years.
DGII's Operating Margin of 13.11% is amongst the best of the industry. DGII outperforms 83.33% of its industry peers.
In the last couple of years the Operating Margin of DGII has grown nicely.
DGII has a better Gross Margin (61.11%) than 81.25% of its industry peers.
In the last couple of years the Gross Margin of DGII has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.11% | ||
| PM (TTM) | 10.07% | ||
| GM | 61.11% |
OM growth 3Y44.91%
OM growth 5Y23.58%
PM growth 3Y16.34%
PM growth 5Y6.17%
GM growth 3Y2.95%
GM growth 5Y4.71%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), DGII is destroying value.
The number of shares outstanding for DGII has been increased compared to 1 year ago.
Compared to 5 years ago, DGII has more shares outstanding
The debt/assets ratio for DGII has been reduced compared to a year ago.
2.2 Solvency
DGII has an Altman-Z score of 5.48. This indicates that DGII is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 5.48, DGII belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
DGII has a debt to FCF ratio of 0.67. This is a very positive value and a sign of high solvency as it would only need 0.67 years to pay back of all of its debts.
DGII has a better Debt to FCF ratio (0.67) than 77.08% of its industry peers.
DGII has a Debt/Equity ratio of 0.12. This is a healthy value indicating a solid balance between debt and equity.
DGII has a Debt to Equity ratio of 0.12. This is in the better half of the industry: DGII outperforms 60.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | 0.67 | ||
| Altman-Z | 5.48 |
ROIC/WACC0.61
WACC10.23%
2.3 Liquidity
A Current Ratio of 1.57 indicates that DGII should not have too much problems paying its short term obligations.
DGII has a worse Current ratio (1.57) than 62.50% of its industry peers.
DGII has a Quick Ratio of 1.12. This is a normal value and indicates that DGII is financially healthy and should not expect problems in meeting its short term obligations.
DGII has a Quick ratio of 1.12. This is in the lower half of the industry: DGII underperforms 66.67% of its industry peers.
The current and quick ratio evaluation for DGII is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.57 | ||
| Quick Ratio | 1.12 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.52% over the past year.
Measured over the past years, DGII shows a very strong growth in Earnings Per Share. The EPS has been growing by 52.66% on average per year.
Looking at the last year, DGII shows a decrease in Revenue. The Revenue has decreased by -4.68% in the last year.
Measured over the past years, DGII shows a quite strong growth in Revenue. The Revenue has been growing by 10.78% on average per year.
EPS 1Y (TTM)3.52%
EPS 3Y87.89%
EPS 5Y52.66%
EPS Q2Q%6%
Revenue 1Y (TTM)-4.68%
Revenue growth 3Y11.17%
Revenue growth 5Y10.78%
Sales Q2Q%2.2%
3.2 Future
DGII is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.09% yearly.
The Revenue is expected to grow by 2.68% on average over the next years.
EPS Next Y3.99%
EPS Next 2Y4.99%
EPS Next 3Y4.09%
EPS Next 5YN/A
Revenue Next Year0.04%
Revenue Next 2Y2.17%
Revenue Next 3Y2.68%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 15.65, the valuation of DGII can be described as correct.
77.08% of the companies in the same industry are more expensive than DGII, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of DGII to the average of the S&P500 Index (26.87), we can say DGII is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 14.70, the valuation of DGII can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DGII indicates a somewhat cheap valuation: DGII is cheaper than 70.83% of the companies listed in the same industry.
DGII is valuated cheaply when we compare the Price/Forward Earnings ratio to 35.34, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.65 | ||
| Fwd PE | 14.7 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DGII is valued a bit cheaper than 72.92% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, DGII is valued cheaply inside the industry as 85.42% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.4 | ||
| EV/EBITDA | 14.22 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of DGII may justify a higher PE ratio.
PEG (NY)3.92
PEG (5Y)0.3
EPS Next 2Y4.99%
EPS Next 3Y4.09%
5. Dividend
5.1 Amount
No dividends for DGII!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
32.24
-0.62 (-1.89%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners102.07%
Inst Owner Change0.25%
Ins Owners2.23%
Ins Owner Change11.29%
Market Cap1.20B
Analysts80
Price Target37.91 (17.59%)
Short Float %4.98%
Short Ratio12.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.16%
Min EPS beat(2)-1.13%
Max EPS beat(2)3.45%
EPS beat(4)2
Avg EPS beat(4)1.06%
Min EPS beat(4)-1.13%
Max EPS beat(4)3.45%
EPS beat(8)6
Avg EPS beat(8)3.08%
EPS beat(12)10
Avg EPS beat(12)6.32%
EPS beat(16)14
Avg EPS beat(16)11.99%
Revenue beat(2)0
Avg Revenue beat(2)-1.87%
Min Revenue beat(2)-2.16%
Max Revenue beat(2)-1.57%
Revenue beat(4)0
Avg Revenue beat(4)-1.78%
Min Revenue beat(4)-2.33%
Max Revenue beat(4)-1.04%
Revenue beat(8)1
Avg Revenue beat(8)-1.19%
Revenue beat(12)5
Avg Revenue beat(12)0.43%
Revenue beat(16)8
Avg Revenue beat(16)0.6%
PT rev (1m)0%
PT rev (3m)3.53%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.1%
EPS NY rev (1m)0%
EPS NY rev (3m)2.55%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.55%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.65 | ||
| Fwd PE | 14.7 | ||
| P/S | 2.85 | ||
| P/FCF | 11.4 | ||
| P/OCF | 11.13 | ||
| P/B | 1.97 | ||
| P/tB | 55.63 | ||
| EV/EBITDA | 14.22 |
EPS(TTM)2.06
EY6.39%
EPS(NY)2.19
Fwd EY6.8%
FCF(TTM)2.83
FCFY8.77%
OCF(TTM)2.9
OCFY8.98%
SpS11.29
BVpS16.33
TBVpS0.58
PEG (NY)3.92
PEG (5Y)0.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.4% | ||
| ROE | 6.96% | ||
| ROCE | 7.89% | ||
| ROIC | 6.24% | ||
| ROICexc | 6.48% | ||
| ROICexgc | 50.82% | ||
| OM | 13.11% | ||
| PM (TTM) | 10.07% | ||
| GM | 61.11% | ||
| FCFM | 25.04% |
ROA(3y)2.67%
ROA(5y)2.25%
ROE(3y)4.11%
ROE(5y)3.36%
ROIC(3y)4.84%
ROIC(5y)3.62%
ROICexc(3y)5.05%
ROICexc(5y)3.91%
ROICexgc(3y)38.34%
ROICexgc(5y)28.01%
ROCE(3y)6.13%
ROCE(5y)4.58%
ROICexcg growth 3Y38.18%
ROICexcg growth 5Y29.38%
ROICexc growth 3Y34.71%
ROICexc growth 5Y12.48%
OM growth 3Y44.91%
OM growth 5Y23.58%
PM growth 3Y16.34%
PM growth 5Y6.17%
GM growth 3Y2.95%
GM growth 5Y4.71%
F-Score7
Asset Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | 0.67 | ||
| Debt/EBITDA | 0.79 | ||
| Cap/Depr | 7.55% | ||
| Cap/Sales | 0.61% | ||
| Interest Coverage | 5.46 | ||
| Cash Conversion | 120.96% | ||
| Profit Quality | 248.69% | ||
| Current Ratio | 1.57 | ||
| Quick Ratio | 1.12 | ||
| Altman-Z | 5.48 |
F-Score7
WACC10.23%
ROIC/WACC0.61
Cap/Depr(3y)8.22%
Cap/Depr(5y)8.03%
Cap/Sales(3y)0.67%
Cap/Sales(5y)0.61%
Profit Quality(3y)224.85%
Profit Quality(5y)321.51%
High Growth Momentum
Growth
EPS 1Y (TTM)3.52%
EPS 3Y87.89%
EPS 5Y52.66%
EPS Q2Q%6%
EPS Next Y3.99%
EPS Next 2Y4.99%
EPS Next 3Y4.09%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.68%
Revenue growth 3Y11.17%
Revenue growth 5Y10.78%
Sales Q2Q%2.2%
Revenue Next Year0.04%
Revenue Next 2Y2.17%
Revenue Next 3Y2.68%
Revenue Next 5YN/A
EBIT growth 1Y18.64%
EBIT growth 3Y61.11%
EBIT growth 5Y36.9%
EBIT Next Year34.38%
EBIT Next 3Y13.19%
EBIT Next 5YN/A
FCF growth 1Y117.54%
FCF growth 3Y13.4%
FCF growth 5Y32.74%
OCF growth 1Y109.09%
OCF growth 3Y12.91%
OCF growth 5Y23.47%