Did T-Mobile Certification of Digi Z45 Transform Digi International's (DGII) Cellular Automation Strategy?

• Digi International recently announced that its Digi Z45 Industrial Controller, powered by Digi Axess, is now certified for use on T-Mobile’s cellular network, bringing rapid two-second data updates and integrated PLC plus SCADA functionality to industrial automation systems.
• This certification expands access for industries requiring reliable, cellular-based automation, highlighting Digi’s ability to drive interoperability and near real-time operational control in critical environments.
• We’ll look at how T-Mobile certification for the Digi Z45 could accelerate Digi’s growth in cellular-based industrial automation and recurring revenue streams.

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Digi International Investment Narrative Recap

To be a Digi International shareholder, you have to believe the company can successfully accelerate recurring revenue growth by delivering innovative, cellular-based automation solutions and capturing a larger share of mission-critical industrial markets. The recent T-Mobile certification for its Digi Z45 controller is a positive signal for bolstering automation adoption, yet may not dramatically shift the short-term revenue catalyst given flat topline guidance; the biggest current risk remains whether recurring revenue can offset any slowdown in hardware sales or customer adoption.

Among Digi's recent initiatives, the launch of the Digi XBee 3 BLU module stands out by addressing secure connectivity needs in both industrial and healthcare sectors. This announcement closely aligns with Digi’s focus on expanding its IoT solutions in subscription-based models, which is a central catalyst for supporting stable ARR growth against industry competition.

On the other hand, investors should be aware that recurring revenue growth is still critically needed if hardware demand softens or customers hesitate to embrace...

Read the full narrative on Digi International (it's free!)

Digi International is projected to reach $497.0 million in revenue and $72.6 million in earnings by 2028. This outlook assumes a 5.7% annual revenue growth rate and a $29.9 million increase in earnings from the current level of $42.7 million.

Uncover how Digi International's forecasts yield a $40.50 fair value, a 10% upside to its current price.

Exploring Other Perspectives

Three Simply Wall St Community members estimate Digi International's fair value between US$37.38 and US$53.65 per share. Despite this spread, flat revenue guidance highlights the importance of recurring revenue as a stabilizer, so you may want to compare these outlooks before investing.

Explore 3 other fair value estimates on Digi International - why the stock might be worth as much as 45% more than the current price!

Build Your Own Digi International Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Digi International research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Digi International research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Digi International's overall financial health at a glance.

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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.

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