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 valuation ratios, including a P/E ratio of 35, an EV to EBITDA of 17.30, and a PEG ratio of 0.87. In comparison, peer InterDigital, Inc. has a higher P/E of 43.22, while Harmonic, Inc. shows a much lower EV to EBITDA of 9.46, highlighting the disparity in valuations within the sector.
Digi International's recent stock performance has outpaced the S&P 500, with a year-to-date return of 25.41% compared to the S&P 500's 13.30%. However, the long-term returns reveal a concerning trend, as the 3-year return of 8.75% significantly lags behind the S&P 500's 81.19%, suggesting potential challenges ahead for sustained growth.