What Does Digi International Inc.'s (NASDAQ:DGII) Share Price Indicate?

Digi International Inc. (NASDAQ:DGII), is not the largest company out there, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$42.48 and falling to the lows of US$32.47. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Digi International's current trading price of US$33.55 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Digi International’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Digi International

What's The Opportunity In Digi International?

Good news, investors! Digi International is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $43.16, but it is currently trading at US$33.55 on the share market, meaning that there is still an opportunity to buy now. However, given that Digi International’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Digi International look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to more than double over the next couple of years, the future seems bright for Digi International. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? Since DGII is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on DGII for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy DGII. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

If you'd like to know more about Digi International as a business, it's important to be aware of any risks it's facing. For example, we've found that Digi International has 2 warning signs (1 is significant!) that deserve your attention before going any further with your analysis.

If you are no longer interested in Digi International, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.