Digi International Inc. (NASDAQ:DGII) investors will be delighted, with the company turning in some strong numbers with its latest results. Results were good overall, with revenues beating analyst predictions by 4.6% to hit US$139m. Statutory earnings per share (EPS) came in at US$0.40, some 4.6% above whatthe analysts had expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

After the latest results, the five analysts covering Digi International are now predicting revenues of US$578.5m in 2027. If met, this would reflect a decent 14% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 57% to US$2.02. Before this earnings report, the analysts had been forecasting revenues of US$562.5m and earnings per share (EPS) of US$1.78 in 2027. So it seems there's been a definite increase in optimism about Digi International's future following the latest results, with a nice increase in the earnings per share forecasts in particular.

It will come as no surprise to learn that the analysts have increased their price target for Digi International 18% to US$85.40on the back of these upgrades. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Digi International analyst has a price target of US$90.00 per share, while the most pessimistic values it at US$76.00. This is a very narrow spread of estimates, implying either that Digi International is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Digi International's growth to accelerate, with the forecast 11% annualised growth to the end of 2027 ranking favourably alongside historical growth of 7.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 15% annually. So it's clear that despite the acceleration in growth, Digi International is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Digi International's earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Digi International analysts - going out to 2028, and you can see them free on our platform here.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.