Digi International (DGII) Benefited from Faster Than Expected Recurring Services Revenue

2 days ago 8

Soumya Eswaran

Thu, February 19, 2026 astatine 6:41 AM CST 3 min read

Conestoga Capital Advisors, an plus absorption company, released its fourth-quarter 2025 capitalist letter. As galore believe, US equities experienced coagulated returns successful 2025, with double-digit gains crossed each large indices, yet underlying conditions revealed utmost volatility and marketplace leadership. A transcript of the missive tin beryllium downloaded here. In Q4 2025, Conestoga Capital Advisors Small Cap Strategy returned -1.89% net-of-fees, trailing the Russell 2000 Growth Index’s 1.22% return. The returns were volatile successful the quarter. The “low quality” stocks rally persisted successful the quarter, but astatine a slower gait compared to earlier quarters. Please reappraisal the Strategy’s apical 5 holdings to summation insights into their cardinal selections for 2025.

In its fourth-quarter 2025 capitalist letter, Conestoga Capital Advisors highlighted Digi International Inc. (NASDAQ:DGII). Digi International Inc. (NASDAQ:DGII) is an Internet of Things exertion supplier specializing successful connectivity products, services, and solutions. On February 18, 2026, Digi International Inc. (NASDAQ:DGII) banal closed astatine $49.64 per share. One-month instrumentality of Digi International Inc. (NASDAQ:DGII) was 13.59%, and its shares are up 41.67% implicit the past 12 months. Digi International Inc. (NASDAQ:DGII) has a marketplace capitalization of $1.87 billion.

Conestoga Capital Advisors stated the pursuing regarding Digi International Inc. (NASDAQ:DGII) successful its 4th fourth 2025 capitalist letter:

DGII provides connectivity solutions, including routers, gateways, and embedded systems. The banal performed good successful the 4th arsenic recurring services gross grew faster than expected and margins expanded with premix displacement toward bundle and subscriptions. Improved request visibility successful concern and infrastructure extremity markets, on with disciplined disbursal management, supported net upside. Investors progressively valued the company’s modulation toward a higher-quality, recurring-revenue concern model, differentiating it from much hardware centric small-cap exertion peers.

Digi International Inc. (NASDAQ:DGII) is not connected our database of 30 Most Popular Stocks Among Hedge Funds. According to our database, 16 hedge money portfolios held Digi International Inc. (NASDAQ:DGII) astatine the extremity of the 3rd quarter, up from 11 successful the erstwhile quarter. In the archetypal 4th of 2026, Digi International Inc. (NASDAQ:DGII) delivered grounds gross of $122 million, up 18% twelvemonth implicit year. While we admit the imaginable of Digi International Inc. (NASDAQ:DGII) arsenic an investment, we judge definite AI stocks connection greater upside imaginable and transportation little downside risk. If you're looking for an highly undervalued AI banal that besides stands to payment importantly from Trump-era tariffs and the onshoring trend, spot our escaped study connected the best short-term AI stock.

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