Digi International (DGII) versus Silicom (SILC) Financial Survey

Digi International (NASDAQ: DGII) and Silicom (NASDAQ:SILC) are both small-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings for Digi International and Silicom, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digi International 0 0 4 0 3.00
Silicom 0 0 1 0 3.00

Digi International currently has a consensus price target of $14.00, suggesting a potential upside of 16.67%. Silicom has a consensus price target of $50.00, suggesting a potential upside of 25.44%. Given Silicom’s higher probable upside, analysts plainly believe Silicom is more favorable than Digi International.

Earnings & Valuation

This table compares Digi International and Silicom’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Digi International $181.63 million 1.79 $9.36 million $0.37 32.43
Silicom $125.69 million 2.39 $21.71 million N/A N/A

Silicom has lower revenue, but higher earnings than Digi International.

Insider & Institutional Ownership

80.7% of Digi International shares are held by institutional investors. Comparatively, 33.3% of Silicom shares are held by institutional investors. 6.8% of Digi International shares are held by company insiders. Comparatively, 25.4% of Silicom shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Digi International and Silicom’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Digi International 0.39% 1.41% 1.28%
Silicom 13.61% 13.28% 10.95%

Risk and Volatility

Digi International has a beta of 1.44, indicating that its share price is 44% more volatile than the S&P 500. Comparatively, Silicom has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500.

Summary

Silicom beats Digi International on 7 of the 12 factors compared between the two stocks.

About Digi International

Digi International Inc. provides Internet of Things networking hardware products and solutions. It operates in two segments, Machine-to-Machine and Solutions. It offers cellular routers that provide connectivity for devices over a cellular data network; cellular gateway products that enable devices or groups of devices to be networked in locations where there is no existing network or where access to a network is prohibited; radio frequency products that utilize a range of wireless protocols for PC-to-device or device-to-device connectivity; and Connect, Rabbit, and ARM-based embedded systems on module and single board computers for medical, transportation, and industrial device manufacturers. It also provides console and serial servers, as well as universal serial bus (USB)-to-serial converters, USB over IP products, and multiport USB hubs. In addition, it offers turn-key networking product design, testing, and certification services for wireless technology platforms and applications; implementation planning, application development, on-site support, installation, and customer training services; and Digi Remote Manager, a centralized remote device management solution to meet service level commitments and stay compliant with payment card industry standards, as well as to monitor, diagnose, and fix remote devices. Further, it provides Digi Smart Solution, a system that enables restaurants, groceries, convenience stores, pharmacies, schools, hospitals, and industrial sites to monitor the temperature of food and other perishable goods, as well as to track the completion of operating tasks by employees. It sells its products through a network of distributors, systems integrators, and value added resellers for various businesses and institutions, as well as to original equipment manufacturers and others in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company was founded in 1985 and is headquartered in Minnetonka, Minnesota.

About Silicom

Silicom Ltd., together with its subsidiaries, designs, manufactures, markets, and supports networking and data infrastructure solutions for a range of servers, server based systems, and communications devices in North America, Europe, and the Asia Pacific. It offers server networking interface cards with and without bypass for the server networking industry. The company also provides intelligent and programmable cards, including redirector cards; encryption and data compression hardware acceleration cards; time stamping and full field programmable gate array (FPGA) based network capture and mobile OSS distribution solutions; network processor acceleration cards; FPGA based ultra-low latency solutions; and compute blades, which offer general compute capability in networking intensive environment. In addition, it offers bypass switches and intelligent bypass switches; server to appliance converter products that enable standard servers to be configured as network appliances with front networking ports; and CPE/edge/low end appliance units. The company sells its products to original equipment manufacturers. Silicom Ltd. was founded in 1987 and is headquartered in Kfar Sava, Israel.

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