Digi International (DGII) is drawing fresh attention after detailing its CES 2026 showcase, where it will feature new embedded modules, the Digi XBee Hive gateway, as well as smart city and robotics demonstrations for connected applications.

The CES 2026 announcement comes after a period of firm share price momentum, with Digi International’s 90 day share price return of 21.53% and 1 year total shareholder return of 52.26% pointing to interest that has built rather than faded.

If this kind of connected devices story has your attention, it could be a good moment to scan other high growth tech and AI ideas using high growth tech and AI stocks.

With Digi trading at $44.43, an intrinsic value estimate pointing to a 26% discount and the analyst target sitting only about 8% higher, the key question is whether there is still a mispricing here or if the market is already factoring in future growth.

Most Popular Narrative Narrative: 6.1% Undervalued

Compared with the last close at $44.43, the most followed narrative points to a slightly higher fair value, framing Digi International as modestly undervalued on its long term outlook.

The accelerating transition of customers to Digi's subscription-based and recurring revenue solutions, including higher attach rates on IoT products such as cellular routers and infrastructure management devices, points to ongoing double-digit annual recurring revenue (ARR) growth and improved profit margins, boosting both revenue stability and long-term earnings.

Curious what underpins that confidence in recurring revenue and margins, and how it feeds into the valuation? The narrative is based on specific assumptions about growth, profitability and the discount rate, and these factors could influence how you view Digi’s long term earnings potential.

Result: Fair Value of $47.33 (UNDERVALUED)

However, there are still pressure points, including flat 2025 revenue guidance and regional softness in APAC and Europe, that could challenge those recurring revenue ambitions.

Another Angle On Valuation

Our DCF model presents a different perspective compared to the 6.1% undervalued narrative. On that approach, Digi International at $44.43 appears much cheaper, with an estimate of fair value at $60.26. This indicates a larger gap that the market may or may not close. Which interpretation do you find more convincing?

Build Your Own Digi International Narrative

If you see the numbers differently or simply prefer to test your own assumptions against the data, you can build a fresh view in minutes, starting with Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Digi International.

Looking for more investment ideas?

If Digi International has you thinking bigger about your portfolio, now is the time to scan fresh angles and avoid missing companies that could fit your style.

• Spot potential value gaps by checking out these 877 undervalued stocks based on cash flows that might be pricing in less optimism than their cash flows suggest.
• Chase fast-moving themes by running through these 25 AI penny stocks that sit at the intersection of data, automation and real world adoption.
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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.