Should Quality-Oriented Investors Explore DIGI INTERNATIONAL INC (NASDAQ:DGII)?

In this article we will dive into DIGI INTERNATIONAL INC (NASDAQ:DGII) as a possible candidate for quality investing. Investors should always do their own research, but we noticed DIGI INTERNATIONAL INC showing up in our Caviar Cruise quality screen, which makes it worth to investigate a bit more.

Exploring Why DGII Holds Appeal for Quality Investors.

• DGII has shown strong performance in revenue growth over the past 5 years, with a 10.78% increase. This indicates the company's ability to generate consistent revenue growth and reflects its potential for long-term success.
• The ROIC excluding cash and goodwill of DGII stands at 42.63%, reflecting the company's strong financial management and profitability. This metric underscores its ability to generate favorable returns on the capital invested in its core operations.
• With a favorable Debt/Free Cash Flow Ratio of 1.04, DGII showcases its sound financial discipline and cash flow management. This ratio indicates the company's ability to service its debt obligations while maintaining sufficient free cash flow for future investments or operational needs.
• The Profit Quality (5-year) of DGII stands at 322.0%, highlighting its ability to consistently generate reliable profits. This metric underscores the company's strong business fundamentals and reinforces its position as a financially stable entity.
• DGII has consistently achieved strong EBIT growth over the past 5 years, with a 36.9% increase. This underscores the company's effective management of its operating income and suggests a positive outlook for future profitability.
• With EBIT 5-year growth outpacing its Revenue 5-year growth, DGII showcases its effective cost management and enhanced operational performance. This suggests the company's ability to generate higher earnings from its revenue streams.

Fundamental analysis of DGII

ChartMill employs a sophisticated system to assign a Fundamental Rating to every stock in its analysis. This rating, which ranges from 0 to 10, is determined by carefully assessing multiple fundamental indicators and properties.

DGII gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 49 industry peers in the Communications Equipment industry. DGII has an excellent profitability rating, but there are some minor concerns on its financial health. DGII is not valued too expensively and it also shows a decent growth rate.

Check the latest full fundamental report of DGII for a complete fundamental analysis.

More ideas for quality investing can be found on ChartMill in our Caviar Cruise screen.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.