Analyzing ARRIS International (ARRS) & Digi International (DGII)

ARRIS International (NASDAQ: ARRS) and Digi International (NASDAQ:DGII) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.

Profitability

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

Net Margins Return on Equity Return on Assets
ARRIS International 2.51% 14.02% 5.89%
Digi International 5.16% 3.24% 2.95%

Institutional & Insider Ownership

86.6% of ARRIS International shares are held by institutional investors. Comparatively, 77.8% of Digi International shares are held by institutional investors. 0.9% of ARRIS International shares are held by insiders. Comparatively, 6.9% of Digi International shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ARRIS International $6.83 billion 0.81 $18.10 million $0.87 34.11
Digi International $181.63 million 1.46 $9.36 million $0.35 28.43

ARRIS International has higher revenue and earnings than Digi International. Digi International is trading at a lower price-to-earnings ratio than ARRIS International, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

ARRIS International has a beta of 1.39, suggesting that its share price is 39% more volatile than the S&P 500. Comparatively, Digi International has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for ARRIS International and Digi International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ARRIS International 0 2 5 0 2.71
Digi International 0 1 3 0 2.75

ARRIS International currently has a consensus price target of $33.57, indicating a potential upside of 13.11%. Digi International has a consensus price target of $14.50, indicating a potential upside of 45.73%. Given Digi International’s stronger consensus rating and higher possible upside, analysts clearly believe Digi International is more favorable than ARRIS International.

About ARRIS International

ARRIS International plc is a media entertainment and data communications solutions provider. The Company operates in two segments: Customer Premises Equipment (CPE), and Network & Cloud (N&C). The Company enables service providers, including cable, telephone, and digital broadcast satellite operators, and media programmers to deliver media, voice and Internet Protocol (IP) data services to their subscribers. It is engaged in offering set-tops, digital video and IP television (IPTV) distribution systems, broadband access infrastructure platforms, and associated data and voice CPE, which it also sells directly to consumers through retail channels. Its solutions are complemented by an array of services, including technical support, repair and refurbishment, and system design and integration. The CPE segment consists of CPE Products-Video and CPE Products-Broadband. The N&C segment consists of Infrastructure Products, Cloud Software and Global Services.

About Digi International

Digi International Inc. is a provider of mission and business-critical machine-to-machine (M2M) and Internet-of-Things (IoT) connectivity products and services. The Company creates connected products and deploys and manages critical communications infrastructures in a range of environments. It offers four categories of hardware products: cellular routers and gateways, radio frequency (RF), embedded and network products. The Company’s cellular product category includes its cellular routers and all gateways. The Company’s RF product category includes its XBee modules, as well as other RF Solutions. Its embedded product category includes Digi Connect and Rabbit embedded systems on module and single board computers. Its network product category includes console and serial servers and universal serial bus (USB) connected products. The Company’s service offerings include wireless design services, Digi Device Cloud (which includes Digi Remote Manager) and enterprise support services.

Receive News & Ratings for ARRIS International plc Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for ARRIS International plc and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply