Is Digi International, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Digi International, Inc. has moved from attractive to expensive, indicating a shift towards overvaluation. The company is currently considered overvalued based on its P/E ratio of 35, which is higher than the peer average of approximately 34.86, and its EV to EBITDA ratio of 27.88, which also exceeds the peer average of 16.75. Additionally, the PEG ratio stands at 0.87, suggesting that while the company may have growth potential, its current valuation does not adequately reflect that potential compared to its peers.
In comparison to its peers, InterDigital, Inc. has a higher P/E ratio of 43.22 but a lower PEG ratio of 0.68, indicating it may be more attractively valued despite a higher earnings multiple. Meanwhile, ViaSat, Inc. and Calix, Inc. are considered risky with significantly negative P/E ratios, further emphasizing Digi's relative position in the market. Notably, Digi International has outperformed the S&P 500 in several time frames, including a year-to-date return of 25.41% compared to the S&P 500's 13.30%, but its long-term performance over three and five years shows a stark contrast, with returns of only 8.75% and 126.73% respectively, compared to the S&P's 81.19% and 91.29%. This suggests that while the company has had strong recent performance, its valuation may not be justified in the long run.