Craig-Hallum more cautious on Extreme Networks outlook, downgrades to Hold

As previously reported, Craig-Hallum downgraded Extreme Networks (EXTR) to Hold from Buy with a price target of $17.50, down from $22. The firm notes that CDW (CDW) negatively pre-released its quarterly results and sharply lowered its outlook for U.S. IT spending this year. Craig-Hallum is "surprised by the magnitude of the more cautious spending outlook shift," which in turn makes it more cautious regarding Extreme Network’s previous outlook for the company’s demand to remain strong and its backlog to remain stable for several quarters before beginning to be worked down, as well as for previous expectations of the company’s strong backlog of $542 million to take until the end of fiscal 2025 to return to normalized sub-$100 million levels.