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Shareholders of Digi International Inc. (NASDAQ:DGII) will be pleased this week, given that the stock price is up 15% to US$32.77 following its latest second-quarter results. Revenues were US$105m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of US$0.28 were also better than expected, beating analyst predictions by 15%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Digi International after the latest results.
Following last week's earnings report, Digi International's six analysts are forecasting 2025 revenues to be US$423.2m, approximately in line with the last 12 months. Per-share earnings are expected to accumulate 7.0% to US$1.22. Before this earnings report, the analysts had been forecasting revenues of US$422.5m and earnings per share (EPS) of US$1.05 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice increase in earnings per share expectations following these results.
See our latest analysis for Digi International
There's been no major changes to the consensus price target of US$37.17, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Digi International analyst has a price target of US$45.00 per share, while the most pessimistic values it at US$30.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Digi International's revenue growth is expected to slow, with the forecast 2.2% annualised growth rate until the end of 2025 being well below the historical 11% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.3% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Digi International.