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Extreme Networks
(NASDAQ:EXTR)
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Rating:67Neutral
Price Target:
$26.00
▲(13.84% Upside)
Action:Reiterated
Date:10/28/26
EXTR scores positively on fundamentals and outlook: strong free cash flow and improved profitability, reinforced by upbeat earnings-call guidance and accelerating SaaS/Platform 1 traction. The score is held back by a high P/E valuation and a still-leveraged balance sheet with a thin equity cushion, while technical signals are constructive but mixed with modest momentum.
Positive Factors
Revenue and SaaS Growth
Sustained double-digit revenue growth, combined with 22% SaaS ARR expansion, indicates broadening demand and increasing recurring monetization. Platform 1 adoption can deepen customer relationships and support a more predictable revenue base as subscriptions become a larger share of the business.
Negative Factors
Leverage and Thin Equity Cushion
Although leverage has improved substantially from 2024, debt remains high relative to equity and leaves a limited capital cushion. If profitability weakens, this structure could amplify earnings volatility, restrict financial flexibility, and make future investment or refinancing decisions more consequential.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue and SaaS Growth
Sustained double-digit revenue growth, combined with 22% SaaS ARR expansion, indicates broadening demand and increasing recurring monetization. Platform 1 adoption can deepen customer relationships and support a more predictable revenue base as subscriptions become a larger share of the business.
Read all positive factors
Extreme Networks (EXTR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.15B
Dividend YieldN/A
Average Volume (3M)1.38M
Price to Earnings (P/E)74.4
Beta (1Y)1.52
Revenue Growth12.59%
EPS GrowthN/A
CountryUS
Employees2,894
SectorTechnology
Sector Strength88
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.40
Shares Outstanding132,170,700
10 Day Avg. Volume932,534
30 Day Avg. Volume1,382,681
Financial Highlights & Ratios
PEG Ratio-0.15
Price to Book (P/B)47.09
Price to Sales (P/S)3.25
P/FCF Ratio43.80
Enterprise Value/Market Cap1.37
Enterprise Value/Revenue3.28
Enterprise Value/Gross Profit5.30
Enterprise Value/Ebitda47.49
Forecast
1Y Price Target
$33.50Price Target Upside46.67% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)1.31
Revenue Forecast (FY)$1.39B
Extreme Networks Business Overview & Revenue Model
Company Description
Extreme Networks, Inc. is a global provider specializing in software-driven networking solutions. The company designs, develops, and manufactures both wired and wireless network infrastructure equipment, in addition to creating sophisticated softw...
How the Company Makes Money
Extreme Networks primarily generates revenue by selling networking products and related software and services to organizations building or upgrading network infrastructure. Key revenue streams typically include: (1) Product revenue from hardware s...
Extreme Networks Earnings Call Summary
Earnings Call Date:Oct 28, 2026
(Q1-2027)
| Next Earnings Date:Feb 03, 2027
Earnings Call Sentiment Positive
The call was strongly positive. Extreme reported sustained double-digit revenue and product growth, 50% EPS growth, expanding operating and EBITDA margins, record-level cash, accelerating SaaS ARR and Platform 1 adoption, strong customer wins, and raised fiscal 2027 guidance. The main challenges were an Asia-Pacific revenue decline from difficult comparisons, higher memory costs, and a temporary recurring-revenue transition effect, but management said supply availability, pricing actions, demand, and the funnel remain strong.Positive Updates
Double-Digit Revenue Growth and Raised Outlook
First-quarter revenue grew 10% year over year to $341 million, exceeding consensus and the high end of guidance. This marked Extreme's seventh consecutive quarter of double-digit revenue and product revenue growth. Management raised expectations to 10% growth for both the second quarter and full fiscal 2027, with full-year revenue guided to $1.402 billion to $1.412 billion, or 10% year-over-year growth at the midpoint.
Negative Updates
Asia-Pacific Revenue Decline
Revenue in Asia Pacific fell because of elevated prior-year comparisons, although management said Extreme continues to win large deals in the region and has a strong funnel there.
Read all updates
Q1-2027 Updates
Positive
Negative
Double-Digit Revenue Growth and Raised Outlook
First-quarter revenue grew 10% year over year to $341 million, exceeding consensus and the high end of guidance. This marked Extreme's seventh consecutive quarter of double-digit revenue and product revenue growth. Management raised expectations to 10% growth for both the second quarter and full fiscal 2027, with full-year revenue guided to $1.402 billion to $1.412 billion, or 10% year-over-year growth at the midpoint.
Read all positive updates
Company Guidance
For the second quarter of fiscal 27, Extreme Networks expects revenue to be in a range of $345.8 million to $350.8 million, gross margin to be in a range of 62.2% to 62.7%, operating margin to be in a range of 16.4% to 17.4%, and earnings per share to be in a range of $0.32 to $0.34 per share; for fiscal year 2027, it expects revenue to be in a range of $1.402 billion to $1.412 billion, up 10% year-over-year at the midpoint, gross margin to be in a range of 62.3% to 62.8%, operating margin to be in a range of 17.2% to 17.6%, earnings per share to be in a range of a $1.35 to $1.39 per share, and a fiscal 27 non GAAP tax rate of 21.8% for the year. It expects 10% growth for both the second quarter and full year of fiscal 2027, SaaS ARR growth to exceed 20% for the rest of the year, half of customers to be on Platform 1 at the end of this fiscal year and approximately 80% the following year, continued growth across all regions in fiscal 2027, and a sharp reacceleration in recurring revenue growth in fiscal 28.Extreme Networks Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
56
Neutral
Cash Flow
78
Positive
| Breakdown | TTM | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.31B | 1.28B | 1.14B | 1.12B | 1.31B | 1.11B |
| Gross Profit | 813.05M | 789.14M | 709.13M | 630.83M | 754.72M | 629.94M |
| EBITDA | 90.75M | 84.58M | 39.42M | -31.07M | 146.37M | 105.14M |
| Net Income | 52.49M | 42.12M | -7.47M | -85.96M | 78.07M | 44.27M |
Balance Sheet | ||||||
| Total Assets | 1.30B | 1.18B | 1.15B | 1.04B | 1.14B | 1.07B |
| Cash, Cash Equivalents and Short-Term Investments | 244.52M | 211.76M | 231.75M | 156.70M | 234.83M | 194.52M |
| Total Debt | 28.20M | 194.57M | 223.44M | 250.15M | 275.46M | 365.09M |
| Total Liabilities | 1.21B | 1.09B | 1.09B | 1.02B | 1.02B | 978.17M |
| Stockholders Equity | 87.98M | 88.59M | 65.58M | 25.28M | 116.75M | 90.34M |
Cash Flow | ||||||
| Free Cash Flow | 127.23M | 95.24M | 127.32M | 37.37M | 235.41M | 112.74M |
| Operating Cash Flow | 182.60M | 123.18M | 152.03M | 55.49M | 249.21M | 128.18M |
| Investing Cash Flow | -27.85M | -27.94M | -24.71M | -18.12M | -13.80M | -84.95M |
| Financing Cash Flow | -118.59M | -114.50M | -52.59M | -114.98M | -194.78M | -94.66M |
Extreme Networks Technical Analysis
Positive
22.84
Price Trends
22.45
Positive
26.04
Negative
21.94
Positive
Market Momentum
-0.03
Negative
59.11
Neutral
55.88
Neutral
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 22.84 is below the 20-day moving average (MA) of 22.91, above the 50-day MA of 22.45, and above the 200-day MA of 21.94, indicating a bullish trend. The MACD of -0.03 indicates Negative momentum. The RSI at 59.11 is Neutral, neither overbought nor oversold. The STOCH value of 55.88 is Neutral, 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 39 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 0 New Risks
Extreme Networks Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $49.80B | 76.01 | 22.82% | ― | 32.57% | 367.53% | |
71 Outperform | $4.20B | 17.25 | 18.87% | 0.19% | 9.44% | 11.37% | |
71 Outperform | $36.27B | 37.78 | 85.62% | 0.57% | 27.22% | 34.82% | |
67 Neutral | $3.15B | 74.37 | 50.74% | ― | 12.59% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
57 Neutral | $635.99M | -16.14 | -8.42% | ― | -0.70% | -141.66% | |
46 Neutral | $560.59M | -21.66 | -18.82% | 4.42% | 15.75% | 78.71% |
* Technology Sector Average
EXTR
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Extreme Networks Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Extreme Networks Secures New $500 Million Credit Facility
Positive
Jul 30, 2026
On July 29, 2026, Extreme Networks entered into a new Credit Agreement providing a five-year, $500 million revolving loan facility arranged by JPMorgan Chase, replacing its prior credit agreement led by Bank of Montreal. The facility, which carrie...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.