MeritValue

DIGI INTERNATIONAL INC

DGIIdata completeness 100%17 fiscal years on file
The thesis, from the filings

DIGI INTERNATIONAL INC earns about 4% on invested capital, below its ~9% cost of capital, but has diluted owners by 13% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $6.18 and $119.94 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$308.6M1$388.2M2$444.8M3$424M3$430.2M3
Net income$10.4M4$19.4M5$24.8M6$22.5M6$40.8M6
Operating cash flow$57.7M7$37.7M8$36.8M9$83.1M9$108M9
Capital expenditure$2.26M10$1.97M11$4.35M12$2.23M12$2.63M12
Free cash flow (derived)$55.5M7$35.8M8$32.4M9$80.9M9$105.3M9
Total debt$91.6M13$460.4M14$391.6M15$246.4M16$318.3M16
Cash & equivalents$152.4M17$34.9M18$31.7M19$27.5M20$21.9M20
Diluted shares33.4M36.0M36.9M37.0M37.7M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$168.55
your share of equity
Profit it earned you last year
$10.81
Free cash flow it threw off
$27.91
Debt you’d be carrying
$84.34

10 shares is a claim on $168.55 of net worth that earned you $10.81 and generated $27.91 of cash last year, against $84.34 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
4% avg · 5y
FY21 3%FY22 4%FY23 6%FY24 5%FY25 5%

It earned about 4% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+13% shares · 5y

Share count is up 13% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 248% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $6.18 and $119.94 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$119.94
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth20.0%
  • fcfBase$80.9M
DCF · Growth Exit 5Y
$62.01
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth20.0%
  • fcfBase$80.9M
Earnings Power Value
$6.18
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$22.5M
  • growthAssumed0.0%
Graham Number
$20.24
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years20.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $62.01
The three cases
Bear0.0%$22.76
Base20.0%$62.01
Bull20.0%$62.01

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 20.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-09-30 · accession 0000854775-23-000015 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-09-30 · accession 0000854775-24-000033 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-09-30 · accession 0000854775-25-000026 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-09-30 · accession 0000854775-23-000015 (NetIncomeLoss)
  5. 10-K · period ending 2022-09-30 · accession 0000854775-24-000033 (NetIncomeLoss)
  6. 10-K · period ending 2023-09-30 · accession 0000854775-25-000026 (NetIncomeLoss)
  7. 10-K · period ending 2021-09-30 · accession 0000854775-23-000015 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-09-30 · accession 0000854775-24-000033 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-09-30 · accession 0000854775-25-000026 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-09-30 · accession 0000854775-23-000015 (PaymentsToAcquireProductiveAssets)
  11. 10-K · period ending 2022-09-30 · accession 0000854775-24-000033 (PaymentsToAcquireProductiveAssets)
  12. 10-K · period ending 2023-09-30 · accession 0000854775-25-000026 (PaymentsToAcquireProductiveAssets)
  13. 10-K · period ending 2021-09-30 · accession 0000854775-22-000028 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-09-30 · accession 0000854775-23-000015 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-09-30 · accession 0000854775-24-000033 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-09-30 · accession 0000854775-25-000026 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-09-30 · accession 0000854775-22-000028 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-09-30 · accession 0000854775-23-000015 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-09-30 · accession 0000854775-24-000033 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-09-30 · accession 0000854775-25-000026 (CashAndCashEquivalentsAtCarryingValue)