DGII
Digi International Inc.
$66.16
Platform & Compounding FCF
80%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 34.5% below fair value
You pay
$66.16
Bear
$56.03
Fair
$101.01
Bull
$155.74
Bear
$56.03
-15.3%
11% stage 1 growth, 11% discount
Fair
$101.01
+52.7%
19% stage 1 growth, 11% discount
Bull
$155.74
+135.4%
24% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
45%
Implied Market Multiple
25.2x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $70.75 from 18 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $101.01 per share.
Warnings
Wall Street's average price target is $70.75 (from 18 analysts). Our estimate is 57% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions