Extreme Networks (EXTR) AI Stock Analysis

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Extreme Networks

(NASDAQ:EXTR)

Rating:61Neutral

Price Target:―

Extreme Networks shows strong earnings call highlights with significant revenue growth and competitive wins, contributing positively to the stock's outlook. However, financial performance is challenged by operational losses, and valuation metrics are unattractive due to lack of profitability. Technical indicators suggest caution in the short term due to overbought conditions.

Positive Factors

Earnings

EXTR delivered a F3Q25 beat while guiding F4Q in-line, and raised F25 just ahead of consensus.

Market Expansion

An improving macro (including Germany) is driving a robust pipeline and share gains.

Revenue Growth

3Q Revenue benefited from strength in Americas and EMEA with notably strong bookings including subscriptions.

Negative Factors

Market Challenges

Americas was impacted by seasonally soft K-12 spending.

Extreme Networks (EXTR) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$2.17B

Dividend YieldN/A

Average Volume (3M)1.61M

Price to Earnings (P/E)―

Beta (1Y)1.38

Revenue Growth-11.00%

EPS Growth-792.47%

CountryUS

Employees2,656

SectorTechnology

Sector Strength76

IndustryCommunication Equipment

Share Statistics

EPS (TTM)0.21

Shares Outstanding133,167,700

10 Day Avg. Volume1,370,640

30 Day Avg. Volume1,611,981

Financial Highlights & Ratios

PEG Ratio-0.67

Price to Book (P/B)27.45

Price to Sales (P/S)0.00

P/FCF Ratio31.27

Enterprise Value/Market Cap0.85

Enterprise Value/Revenue0.43

Enterprise Value/Gross Profit2.91

Enterprise Value/Ebitda-11.51

Forecast

1Y Price Target

$18.10

Price Target Upside13.84% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering5

Extreme Networks Business Overview & Revenue Model

Company DescriptionExtreme Networks, Inc. provides software-driven networking solutions worldwide. It designs, develops, and manufactures wired and wireless network infrastructure equipment; and develops software for network management, policy, analytics, security, and access controls. The company offers ExtremeCloud IQ, an ML/AI powered, wired, and wireless cloud network management solution that offers advanced visibility and control over users, devices, and applications; ExtremeCloud IQ Site Engine that provides task automation, access control, granular visibility with real-time analytics and multi-vendor device management; and ExtremeCloud IQ Essentials offers WIPS, location services, IoT, and guest management services. It also provides wireless access point products; ExtremeSwitching portfolio that includes access edge products that offer physical presentations along with options to deliver Ethernet or convergence-friendly Power-over-Ethernet (POE), including high-power universal POE; aggregation/core switches designed to address aggregation, top-of-rack, and campus core environments; and data center switches and routers. In addition, the company offers cloud native platforms and applications for service providers; and customer support and services. It markets and sells its products through distributors, resellers, and field sales organizations to healthcare, education, government, manufacturing, retail, and hospitality markets. Extreme Networks, Inc. was incorporated in 1996 and is headquartered in Morrisville, North Carolina.

How the Company Makes MoneyExtreme Networks generates revenue primarily through the sale of its networking hardware and software products. This includes switches, routers, and wireless access points, as well as proprietary software for network management, automation, and security. Additionally, the company offers support and maintenance services, which provide a recurring revenue stream. Extreme Networks also engages in strategic partnerships and alliances with technology providers and resellers to extend its market reach and enhance its product offerings. The company's earnings are influenced by its ability to innovate in networking technology, expand customer relationships, and adapt to changing market demands.

Extreme Networks Financial Statement Overview

Summary

Extreme Networks faces a challenging financial landscape with recent operational losses impacting profitability. The company has managed to improve cash flow generation and leverage, which are positive signs for long-term stability. However, maintaining revenue and reversing operational losses are critical for future growth.

Income Statement

Neutral

Extreme Networks has experienced fluctuating revenue with recent declines. The TTM data shows a negative net profit margin of -4.94%, indicating net losses. The gross profit margin remains decent at 58.19%, suggesting efficient cost management despite lower revenue. However, negative EBIT and EBITDA margins indicate operational challenges.

Balance Sheet

Neutral

The debt-to-equity ratio has improved with a decrease in total debt and an increase in stockholders' equity, reflecting stronger leverage management. The equity ratio remains low at 6.68%, indicating potential risks in financial stability. Positive stockholders' equity is a positive sign for financial health.

Cash Flow

Positive

Operating cash flow has shown improvement, with a TTM operating cash flow to net income ratio of -1.59, suggesting better cash generation relative to net losses. Free cash flow growth is positive, supporting investment and operational needs despite net losses.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
1.09B	1.12B	1.31B	1.11B	1.01B	948.02M
	Gross Profit
634.15M	630.83M	754.72M	629.94M	585.12M	517.84M
	EBIT
-20.61M	-28.88M	108.31M	64.19M	34.38M	-42.66M
	EBITDA
-10.95M	-19.61M	158.62M	120.07M	110.09M	-36.39M
	Net Income Common Stockholders
-53.87M	-85.96M	78.07M	44.27M	1.94M	-126.84M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
185.48M	156.70M	234.83M	194.52M	246.89M	193.87M
	Total Assets
1.07B	1.04B	1.14B	1.07B	1.01B	979.09M
	Total Debt
60.02M	239.60M	264.61M	351.13M	390.84M	480.54M
	Net Debt
-125.46M	82.91M	29.78M	156.61M	143.95M	286.66M
	Total Liabilities
1.00B	1.02B	1.02B	978.17M	955.63M	973.69M
	Stockholders Equity
71.70M	25.28M	116.75M	90.34M	54.47M	5.40M
Cash Flow		Free Cash Flow
63.02M	37.37M	235.41M	112.74M	127.36M	20.62M
	Operating Cash Flow
85.58M	55.49M	249.21M	128.18M	144.53M	35.88M
	Investing Cash Flow
-22.56M	-18.12M	-13.80M	-84.95M	-17.18M	-189.48M
	Financing Cash Flow
-28.16M	-114.98M	-194.78M	-94.66M	-74.78M	178.49M

Extreme Networks Technical Analysis

Technical Analysis Sentiment

Positive

Last Price15.90

Price Trends

50DMA

13.71

Positive

100DMA

14.88

Positive

200DMA

15.18

Positive

Market Momentum

MACD

0.87

Negative

RSI

67.79

Neutral

STOCH

85.94

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EXTR, the sentiment is Positive. The current price of 15.9 is above the 20-day moving average (MA) of 14.66, above the 50-day MA of 13.71, and above the 200-day MA of 15.18, indicating a bullish trend. The MACD of 0.87 indicates Negative momentum. The RSI at 67.79 is Neutral, neither overbought nor oversold. The STOCH value of 85.94 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EXTR.

Extreme Networks Risk Analysis

Extreme Networks disclosed 40 risk factors in its most recent earnings report. Extreme Networks reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 3 New Risks

Any actual or perceived failure to comply with new or existing laws, regulations and other requirements relating to the privacy, security and processing of personal information could adversely affect our business, results of operations, or financial condition. Q2, 2024

Supply chain issues such as concentration of suppliers and manufacturing partners, supplier disruptions, shipping delays, material or components shortages, quality control, regulatory impacts, and inability to reduce manufacturing costs could harm our business, financial condition, and operating results. Q2, 2024

If we are not able to effectively forecast demand or manage our inventory, we may be required to record write-downs for excess or obsolete inventory. Q2, 2024

Extreme Networks Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HPE	70 Outperform	$22.94B	8.64	12.09%	2.93%	10.93%	43.19%
CIEN	68 Neutral	$11.52B	148.05	2.76%	―	-7.29%	-64.31%
JNPR	64 Neutral	$12.08B	34.53	7.58%	2.43%	-2.56%	52.05%
UI	63 Neutral	$25.99B	47.36	237.68%	0.59%	21.43%	56.87%
EXTR	61 Neutral	$2.17B	―	-78.83%	―	-11.00%	-792.47%
Sector *	60 Neutral	$11.56B	10.24	-7.04%	2.94%	7.46%	-10.54%
LITE	58 Neutral	$5.40B	―	-42.79%	―	3.58%	-22.74%

* Technology Sector Average

Performance Comparison

EXTR

Extreme Networks

15.90

4.48

39.23%

CIEN

Ciena

79.92

30.36

61.26%

JNPR

Juniper Networks

35.99

2.14

6.32%

Ubiquiti Networks

393.56

242.72

160.91%

LITE

Lumentum Holdings

75.95

30.46

66.96%

HPE

Hewlett Packard Enterprise

17.54

-0.12

-0.68%

Extreme Networks Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q3-2025)

% Change Since: 19.37%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant revenue growth, competitive wins, and innovation with Extreme Platform ONE, indicating strong business performance. However, concerns about potential tariff impacts and some regional revenue stagnation were mentioned. Overall, the positive aspects outweigh the negative, suggesting a strong position moving forward.

Q3-2025 Updates

Positive Updates

Significant Revenue Growth

Revenue reached $284.5 million, representing a 35% increase year-over-year, with strong performance in EMEA (81% YoY growth) and Americas (19% YoY growth).

Record Product Bookings

Achieved the best quarter of product bookings in six quarters, with 40 customers generating over $1 million in bookings, up from 36 last quarter.

Strong Competitive Wins

Significant wins against major players like Cisco, HP, and Juniper in key accounts such as City of Everett, West London NHS Hospital, and the United Soccer League.

New Partner Additions

Added 11 new partners to the MSP program, bringing the total to 48, with the industry's first consumption-based billing model.

Innovation with Extreme Platform ONE

Early indications show Extreme Platform ONE will be a game changer with holistic AI for networking, gaining momentum in the market.

Strong Financial Performance

Achieved non-GAAP operating income of $40 million with a 14.1% operating margin and generated $30 million in operating cash flow.

Negative Updates

Tariff Impact Concerns

Potential tariff impacts estimated at $1.5 million per quarter, with uncertainty around future tariff negotiations.

Flat APAC Revenue

APAC revenue was flat year-over-year, although bookings were up double digits.

Gross Margin Pressure

Gross margin decreased by 110 basis points sequentially, impacted by higher product revenue mix and potential tariff costs.

Company Guidance

During the Extreme Networks Q3 FY 2025 earnings call, the company reported a revenue of $284.5 million, marking a 35% increase year-over-year, with strong performances in both EMEA and the Americas, particularly a 21% sequential growth in the latter. CEO Ed Meyercord highlighted robust demand for both wired and wireless network solutions, with 40 customers generating over $1 million in bookings, up from 36 last quarter, indicating success in larger enterprise deals. Competitive wins against major players like Cisco, HP, and Juniper were attributed to their Campus Fabric solution, leading to higher win rates across various verticals. The company also saw strong momentum in their subscription business, with SaaS annual recurring revenue reaching $184 million, a 13.4% year-over-year increase. CFO Kevin Rhodes noted that they achieved an earnings per share of $0.21, aligning with the prior quarter and exceeding the high end of their guidance range. For Q4, the revenue guidance was set between $295 million and $305 million, with gross margins expected to be in the range of 61.8% to 62.8%. The full fiscal year 2025 revenue is projected to be between $1.128 billion and $1.138 billion.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.