Extreme Networks (EXTR)
NASDAQ:EXTR
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Extreme Networks
(NASDAQ:EXTR)
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Rating:66Neutral
Price Target:
$27.00
▲(50.08% Upside)
Action:Reiterated
Date:05/15/26
The score is driven primarily by improving operating fundamentals and strong free cash flow, reinforced by upbeat guidance and accelerating SaaS/recurring revenue trends. The main constraints are balance-sheet leverage and thin margins, while valuation (high P/E) limits upside if execution or growth slows; technicals are supportive but appear overbought.
Positive Factors
Free Cash Flow Strength
Sustained free cash flow (~$140M TTM) enhances financial flexibility: it funds buybacks, strategic investments, and debt reduction without depending on equity raises. High FCF conversion versus earnings supports durable liquidity and buffers the company through cyclical demand swings.
Negative Factors
Elevated Leverage
Debt/equity around 2.2x constrains strategic optionality: higher leverage increases interest and covenant risk, limits M&A or R&D flexibility, and leaves less buffer for downturns. Even with improvement, balance‑sheet leverage remains a notable medium‑term constraint on execution.
Read all positive and negative factors
Positive Factors
Negative Factors
Free Cash Flow Strength
Sustained free cash flow (~$140M TTM) enhances financial flexibility: it funds buybacks, strategic investments, and debt reduction without depending on equity raises. High FCF conversion versus earnings supports durable liquidity and buffers the company through cyclical demand swings.
Read all positive factors
Extreme Networks (EXTR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.15B
Dividend YieldN/A
Average Volume (3M)3.02M
Price to Earnings (P/E)47.3
Beta (1Y)1.81
Revenue Growth14.90%
EPS GrowthN/A
CountryUS
Employees2,656
SectorTechnology
Sector Strength88
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.12
Shares Outstanding130,778,090
10 Day Avg. Volume2,829,566
30 Day Avg. Volume3,017,577
Financial Highlights & Ratios
PEG Ratio3.48
Price to Book (P/B)36.22
Price to Sales (P/S)2.08
P/FCF Ratio18.66
Enterprise Value/Market Cap0.98
Enterprise Value/Revenue2.48
Enterprise Value/Gross Profit4.05
Enterprise Value/Ebitda48.94
Forecast
1Y Price Target
$26.42Price Target Upside46.84% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)1.03
Revenue Forecast (FY)$1.28B
Extreme Networks Business Overview & Revenue Model
Company Description
Extreme 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, ...
How the Company Makes Money
Extreme Networks primarily makes money by selling networking products and associated software and services to enterprise and other organizational customers. Key revenue streams generally include: (1) Product revenue from hardware such as Ethernet ...
Extreme Networks Earnings Call Summary
Earnings Call Date:Apr 29, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Aug 12, 2026
Earnings Call Sentiment Positive
The call highlighted multiple clear operational and financial improvements: revenue beat, sustained double-digit growth, rapid SaaS ARR acceleration (+29% YoY), margin expansion (62.3% GM, +30 bps q/q), recordably strong EBITDA, resolved supply constraints and meaningful product and partner traction (Wi‑Fi 7 adoption, Platform ONE wins, MSP growth). Lowlights were primarily execution/timing and margin-transmission uncertainties — higher component costs necessitating price increases whose net benefits are diluted by discounting, some project timing shifts and regional shipping delays. Overall, positives (growth, margin improvement, supply resolution, recurring revenue momentum, capital returns) materially outweigh the challenges, though timing and competitive dynamics require monitoring.Positive Updates
Revenue Beat and Sustained Growth
Total revenue of $317.0M, up 11% year-over-year, beat the high end of guidance. This marks 5 consecutive quarters of double-digit revenue growth and 8 quarters of sequential product revenue growth; product revenue rose 12% year-over-year.
Negative Updates
Higher Component Costs and Price Increase Headwinds
Rising memory and component costs required selective price increases (mid-single-digit in Nov; additional increases in March). Net realized pricing is diluted by industry discounting (company notes typical discount rates that reduce a headline price increase to ~2%–3% net), so margin benefit timing and magnitude remain constrained.
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Q3-2026 Updates
Positive
Negative
Revenue Beat and Sustained Growth
Total revenue of $317.0M, up 11% year-over-year, beat the high end of guidance. This marks 5 consecutive quarters of double-digit revenue growth and 8 quarters of sequential product revenue growth; product revenue rose 12% year-over-year.
Read all positive updates
Company Guidance
Extreme guided Q4 revenue of $330–335 million with gross margins of 61.8%–62.2%, operating margins of 15.2%–16.1% and EPS of $0.28–0.30 on roughly 132 million diluted shares; for full FY2026 it expects revenue of $1.275–1.280 billion (midpoint implying ≈12% y/y growth), full‑year gross margin of 61.8%–61.9%, operating margin of 14.7%–14.9% and EPS of $1.02–1.04. Management also reiterated strong SaaS momentum (Q3 SaaS ARR $236M, +29% y/y; guidance for long‑run SaaS ARR growth of ~20%–30%), highlighted $342M of SaaS deferred revenue (+19% y/y), subscription & support of $114M (36% of revenue), exited the quarter with >$200M annualized EBITDA, and noted $137.5M remaining of a $200M share‑repurchase authorization after a $50M buyback.Extreme Networks Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
48
Neutral
Cash Flow
72
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.25B | 1.14B | 1.12B | 1.31B | 1.11B | 1.01B |
| Gross Profit | 767.33M | 709.13M | 628.79M | 752.67M | 626.70M | 573.41M |
| EBITDA | 63.43M | 39.42M | -19.61M | 158.62M | 120.07M | 110.09M |
| Net Income | 16.27M | -7.47M | -85.96M | 78.07M | 44.27M | 1.94M |
Balance Sheet | ||||||
| Total Assets | 1.17B | 1.15B | 1.04B | 1.14B | 1.07B | 1.01B |
| Cash, Cash Equivalents and Short-Term Investments | 210.11M | 231.75M | 156.70M | 234.83M | 194.52M | 246.89M |
| Total Debt | 235.74M | 223.44M | 250.15M | 275.46M | 365.09M | 409.59M |
| Total Liabilities | 1.09B | 1.09B | 1.02B | 1.02B | 978.17M | 955.63M |
| Stockholders Equity | 78.97M | 65.58M | 25.28M | 116.75M | 90.34M | 54.47M |
Cash Flow | ||||||
| Free Cash Flow | 139.55M | 127.32M | 37.37M | 235.41M | 112.74M | 127.36M |
| Operating Cash Flow | 132.27M | 152.03M | 55.49M | 249.21M | 128.18M | 144.53M |
| Investing Cash Flow | -27.01M | -24.71M | -18.12M | -13.80M | -84.95M | -17.18M |
| Financing Cash Flow | -80.33M | -52.59M | -114.98M | -194.78M | -94.66M | -74.78M |
Extreme Networks Technical Analysis
Positive
17.99
Price Trends
18.29
Positive
16.70
Positive
18.12
Positive
Market Momentum
1.79
Positive
63.96
Neutral
63.33
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 17.99 is below the 20-day moving average (MA) of 21.87, below the 50-day MA of 18.29, and below the 200-day MA of 18.12, indicating a bullish trend. The MACD of 1.79 indicates Positive momentum. The RSI at 63.96 is Neutral, neither overbought nor oversold. The STOCH value of 63.33 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 |
|---|---|---|---|---|---|---|---|
70 Outperform | $2.36B | 40.13 | 6.72% | ― | 13.48% | 0.69% | |
66 Neutral | $3.15B | 47.32 | 21.07% | ― | 14.90% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $9.71B | 44.93 | -7.45% | ― | 2.07% | 20.79% | |
60 Neutral | $11.64B | 313.93 | -6.92% | ― | 30.59% | -1171.00% | |
53 Neutral | $1.21B | -191.23 | -24.02% | ― | 18.84% | 77.12% |
* Technology Sector Average
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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.