NasdaqGS:EXTR

Stock Analysis Report

Executive Summary

Extreme Networks, Inc. provides software-driven networking solutions for enterprise, data center, and service provider customers worldwide.

Rewards

Earnings have grown 22.7% per year over the past 5 years

Risk Analysis

Currently unprofitable and not forecast to become profitable over the next 3 years

Shareholders have been diluted in the past year



Snowflake Analysis

Mediocre balance sheet with weak fundamentals.


Similar Companies

Share Price & News

How has Extreme Networks's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: EXTR has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.2%

EXTR

-1.9%

US Communications

0.7%

US Market


1 Year Return

12.1%

EXTR

-6.1%

US Communications

18.2%

US Market

Return vs Industry: EXTR exceeded the US Communications industry which returned -6.1% over the past year.

Return vs Market: EXTR underperformed the US Market which returned 18.2% over the past year.


Shareholder returns

EXTRIndustryMarket
7 Day-1.2%-1.9%0.7%
30 Day-1.2%-8.2%1.5%
90 Day-3.0%-9.7%5.0%
1 Year12.1%12.1%-3.9%-6.1%20.8%18.2%
3 Year45.0%45.0%37.4%28.6%45.2%35.8%
5 Year107.9%107.9%64.3%45.9%71.6%52.7%

Price Volatility Vs. Market

How volatile is Extreme Networks's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Extreme Networks undervalued compared to its fair value and its price relative to the market?

8.88x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: EXTR ($6.86) is trading above our estimate of fair value ($3.54)

Significantly Below Fair Value: EXTR is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: EXTR is unprofitable, so we can't compare its PE Ratio to the Communications industry average.

PE vs Market: EXTR is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate EXTR's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: EXTR is overvalued based on its PB Ratio (8.9x) compared to the US Communications industry average (1.8x).


Next Steps

Future Growth

How is Extreme Networks forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

4.4%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if EXTR's forecast earnings growth is above the savings rate (1.7%).

Earnings vs Market: Insufficient data to determine if EXTR's earnings are forecast to grow faster than the US market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: EXTR's revenue (4.4% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: EXTR's revenue (4.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if EXTR's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Extreme Networks performed over the past 5 years?

22.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EXTR is currently unprofitable.

Growing Profit Margin: EXTR is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: EXTR is unprofitable, but has reduced losses over the past 5 years at a rate of 22.7% per year.

Accelerating Growth: Unable to compare EXTR's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: EXTR is unprofitable, making it difficult to compare its past year earnings growth to the Communications industry (17.3%).


Return on Equity

High ROE: EXTR has a negative Return on Equity (-58.1%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Extreme Networks's financial position?


Financial Position Analysis

Short Term Liabilities: EXTR's short term assets ($434.7M) exceed its short term liabilities ($411.5M).

Long Term Liabilities: EXTR's short term assets ($434.7M) do not cover its long term liabilities ($546.5M).


Debt to Equity History and Analysis

Debt Level: EXTR's debt to equity ratio (394.2%) is considered high.

Reducing Debt: EXTR's debt to equity ratio has increased from 84.2% to 394.2% over the past 5 years.


Balance Sheet

Inventory Level: EXTR has a high level of physical assets or inventory.

Debt Coverage by Assets: EXTR's debt is covered by short term assets (assets are 1.2x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable EXTR has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: EXTR is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 14.9% per year.


Next Steps

Dividend

What is Extreme Networks's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage3.2%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate EXTR's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate EXTR's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if EXTR's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if EXTR's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of EXTR's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Extreme Networks's salary, the management and board of directors tenure and is there insider trading?

2.2yrs

Average management tenure


CEO

Ed Meyercord (54yo)

4.7yrs

Tenure

US$3,668,634

Compensation

Mr. Edward B. Meyercord, III, also known as Ed, has been the President and Chief Executive Officer of Extreme Networks, Inc. since April 19, 2015. Mr. Meyercord has extensive executive experience in leader ...


CEO Compensation Analysis

Compensation vs Market: Ed's total compensation ($USD3.67M) is above average for companies of similar size in the US market ($USD2.63M).

Compensation vs Earnings: Ed's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.2yrs

Average Tenure

55yo

Average Age

Experienced Management: EXTR's management team is considered experienced (2.2 years average tenure).


Board Age and Tenure

5.0yrs

Average Tenure

65yo

Average Age

Experienced Board: EXTR's board of directors are considered experienced (5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$822,33005 Aug 19
Edward Meyercord
EntityIndividual
Role
Chief Executive Officer
President
Shares100,000
Max PriceUS$8.22

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.7%.


Management Team

  • Ed Meyercord (54yo)

    President

    • Tenure: 4.7yrs
    • Compensation: US$3.67m
  • Eric Broockman (64yo)

    Chief Technology Officer

    • Tenure: 5.8yrs
  • Norman Rice (45yo)

    Chief Operating Officer

    • Tenure: 0.3yrs
    • Compensation: US$886.60k
  • Katy Motiey

    Chief Administrative Officer & Corporate Secretary

    • Tenure: 2.1yrs
    • Compensation: US$1.37m
  • Dean Chabrier

    Chief People Officer

    • Tenure: 1.9yrs
  • Gina Christopher

    Deputy General Counsel

    • Tenure: 0yrs
  • Stephen Patak

    Senior Vice President of Sales-Americas

    • Tenure: 3.3yrs
  • Bob Gault (56yo)

    Chief Revenue & Services Officer

    • Tenure: 2.3yrs
    • Compensation: US$1.39m
  • Stan Kovler

    Senior Director of Investor Relations & Finance

    • Tenure: 0yrs
  • Rémi Thomas

    Executive VP & CFO

    • Tenure: 1.1yrs
    • Compensation: US$2.64m

Board Members

  • Ed Meyercord (54yo)

    President

    • Tenure: 4.7yrs
    • Compensation: US$3.67m
  • John Shoemaker (77yo)

    Independent Chairman

    • Tenure: 2.8yrs
    • Compensation: US$291.00k
  • Charlie Carinalli (71yo)

    Independent Director

    • Tenure: 15.9yrs
    • Compensation: US$245.00k
  • Ed Kennedy (65yo)

    Independent Director

    • Tenure: 8.7yrs
    • Compensation: US$240.50k
  • Kathleen Holmgren (61yo)

    Independent Director

    • Tenure: 4.1yrs
    • Compensation: US$233.73k
  • Raj Khanna (73yo)

    Independent Director

    • Tenure: 5yrs
    • Compensation: US$248.00k
  • Ingrid Burton (56yo)

    Director

    • Tenure: 0.3yrs

Company Information

Extreme Networks, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Extreme Networks, Inc.
  • Ticker: EXTR
  • Exchange: NasdaqGS
  • Founded: 1996
  • Industry: Communications Equipment
  • Sector: Tech
  • Market Cap: US$833.948m
  • Shares outstanding: 121.57m
  • Website: https://www.extremenetworks.com

Number of Employees


Location

  • Extreme Networks, Inc.
  • 6480 Via del Oro
  • San Jose
  • California
  • 95119
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
EXTRNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDApr 1999
EXMDB (Deutsche Boerse AG)YesCommon StockDEEURApr 1999
0IJWLSE (London Stock Exchange)YesCommon StockGBUSDApr 1999

Biography

Extreme Networks, Inc. provides software-driven networking solutions for enterprise, data center, and service provider customers worldwide. It designs, develops, and manufactures wired and wireless network ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/09 23:38
End of Day Share Price2019/12/09 00:00
Earnings2019/09/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.