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Fundamental analysis: Digi International Inc. (DGII)

Awarener score: 5.8

Conclusion

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 7.5

• Business has been growing at a good pace. It's been more than average in relation to peer companies.
• Digi International Inc. business trend stability is very good. The higher the stability, the lower the risk. It looks somewhat better than rivals.

Margins score: 6.3

• DGII profit margins -on goods and services sold- are usually very good. They stand well ranked against rival companies.
• Business profit on sales tends to be good. It's encouraging in relation to competitors.
• Profits on sales made -available to repay debt and purchase properties- are usually sufficient. They remain a slight improvement compared to peers.
• Earnings -before income taxes and interests on loans taken- tend to be hardly sufficient in relation to total revenues. They're still somewhat better than similar companies.
• Profits -before income taxes- are usually sufficient considering total sales, and remain encouraging in relation to rivals.
• Total net profit tends to be sufficient when confronted to sales. Company stands more than average in relation to comparable firms.

Growth score: 8.3

• Digi International Inc. profit -on goods and services sold- has been growing at a good pace. It's been excellent in relation to competitors.
• In recent years, earnings -on operations- have been growing at an excellent step, which has been well ranked against comparable firms.
• Profits -available to repay debt and purchase properties- have been growing at an excellent pace, which compares more than average in relation to peer enterprises.
• Earnings -before income taxes and interests on loans taken- have been growing at an excellent tempo. It turns to be a slight improvement compared to similar stocks.
• In past years, profits -before income taxes- grew at an excellent speed. It was somewhat better than rivals.
• In the previous years, growth trend on total net profit has been very good, and encouraging in relation to peer companies.
• Earnings per share have grown at a good rhythm in past years. It's been a slight improvement compared to industry peers.

Miscellaneous score: 7.3

• DGII managed to get a credit on income taxes in the past years, even though it earned money. It's been better than most peers.
• Research and development expenses consume a moderate portion of revenues. It's below average when measured against competitors.
• The company grows modestly in relation to research and development efforts. It stands in good shape compared to rival companies.

Profitability score: 5.8

• Digi International Inc. usually gets sufficient returns on the resources it controls. It proves encouraging in relation to peer firms.
• The company normally gets hardly sufficient proceeds -on the resources directly invested in the business-. They remain a slight improvement compared to similar companies.
• Profitability -in relation to owned resources- is usually modest. It ranks more than average in relation to competitors.
• In the past, got good returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's more than average in relation to comparable enterprises.

Usage of Funds score: 3.6

• DGII usually uses a portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is rather normal. It stands more than average in relation to rival firms.
• The company is usually sparsely replacing property, plant, and equipment that gets old, instead using funds in something else. It can't keep forever, which is last-in-rank when measured against industry peers.
• In the past twelve months the stock paid no dividends. It came bottom tier against competitors.
• The company pays no dividend, so measuring its growth is meaningless. The company has behaved in an conservative way compared to similar firms.
• As no dividends are paid, it is useless trying to estimate their sustainability in time. Sustainability looks not applicable in regard to comparable companies.
• The company usually significantly enlarges the pool of investors, resulting in more mouths feeding on the pie of profits. It remains in a weak position compared to peer enterprises.
• Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands close to average when compared to rivals.
• We do not have sufficient data to comment on buybacks and their sustainability. It still looks dubious against competitors.

Balance Sheet score: 4.4

• Digi International Inc. intangible assets (like brands and goodwill) represent a very large portion of resources controlled, according to accounting books. There could be major difficulties in liquidating them if the company ever gets in financial distress. It happens to be substantially worse when measured against peer companies.
• The company has roughly double short-term resources than short-term obligations. Liquidity concerns are normally not an issue. It turns to be close to average when compared to similar firms.
• Roughly a third of resources controlled were provided for with financial debt. Creditors have claims on the company. It remains mediocre against rival firms.
• Most controlled resources might be only slowly turned into cash and equivalents, which is risky. It looks last-in-rank when measured against rivals.
• For every dollar of short-term obligations, the company has roughly another of cash and short-term receivables. It's lacking compared to peer firms.
• For every dollar of short-term obligations, the company has roughly half of cash and equivalents, which is slightly worse than similar enterprises.
• Usually, sales are on a two-months credit. It still ranks more than average in relation to peers.
• Normally has approximately five months of sales worth in inventory. It comes up as in a weak position compared to competitors.
• On average, it takes higher than six months from the purchase to charging customers. It happens to be somewhat worse than peers.
• On average pays suppliers longer than two months after the purchase. It ranks below average when measured against industry peers.
• The company pays its suppliers six months or more before charging its customers, so there's abundant money invested in working capital. It's lacking compared to similar companies.
• Usual business earnings barely cover net interest expenses. Creditors may be earning money by assuming risks, but hardly shareholders. Situation is risky, profitability must increase, or additional stockholders' funding will eventually be required. It stands worse than most rival firms.
• Business earnings have usually been excellent when measured against loans taken. It could take less than two years to repay the obligations with current profitability. It ranks great when measured against comparable enterprises.
• Revenues are very good in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. Low property, plant, and equipment requirements allows the company to keep more money to reward stockholders in the long run. It looks close to average when compared to similar firms.
• Resource exploitation is reasonable when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still worse than most peer companies.

Valuation score: 4.4

• Digi International Inc. looks heavily expensive in relation to profits and financial position. It happens to be substantially worse when measured against competitors.
• Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains a disappointment compared to peers.
• In the past twelve months, the company generated some slightly better free funds in relation to the stock price, which stands somewhat better than similar companies.
• The company usually generates somewhat more than enough genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, the current valuation might be reasonable. It's still almost average when measured against industry firms.
• In the past twelve months, the company has enlarged the pool of investors by issuing new shares. Future profits need to be high enough to justify the measure, as the pie of earnings will now be split among somewhat more stockholders. It came up lacking compared to peer ventures.
• The company is somewhat indebted, loan repayment needs to be taken into account. It looks mediocre against similar enterprises.
• Considering the past twelve months, traditional Price-to-Earnings relation is very high. A lot of improvement expectations are already in the stock price, which is risky. It ranks substantially worse when measured against peer companies.
• Comparing the current stock price with the past twelve-months revenues gives a high relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in a very weak position compared to rival firms.
• The relation between the stock price and accounting book value is high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains slightly worse than peer firms.
• In the past twelve months, the operating business earned little money when compared to the current stock price and financial position. It happens to be similar to industry peers.
• In an alternate metric of bang for the buck, the company has usually shown a mediocre earnings power ability when measured against the current stock price and financial position. It's still rather normal in relation to peer companies.

Total score: 6.0

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Awarener score: 5.8

Conclusion

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