Extreme Networks (EXTR) AI Stock Analysis

• Market Cap: $1.96B
• Dividend Yield: N/A
• Average Volume (3M): 1.37M
• Price to Earnings (P/E): 218.3
• Beta (1Y): 1.77
• Revenue Growth: 14.31%
• EPS Growth: N/A
• Country: US
• Employees: 2,656
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 0.26
• Shares Outstanding: 133,718,480
• 10 Day Avg. Volume: 2,069,494
• 30 Day Avg. Volume: 1,373,767
• PEG Ratio: 3.48
• Price to Book (P/B): 36.22
• Price to Sales (P/S): 2.08
• P/FCF Ratio: 18.66
• Enterprise Value/Market Cap: 0.99
• Enterprise Value/Revenue: 1.59
• Enterprise Value/Gross Profit: 2.60
• Enterprise Value/Ebitda: 35.17
• 1Y Price Target: $23.38
• Price Target Upside: 60.36% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): 1
• Revenue Forecast (FY): $1.26B

• Rating: 54 Neutral
• Price Target: $15.50 ▲(6.31% Upside)

EXTR scores mid-range: the strongest driver is the positive earnings-call trajectory (raised guidance, improving margins/recurring revenue and strong cash generation), but this is offset by elevated leverage and thin underlying profitability, bearish technical momentum, and a very high P/E valuation.

Positive Factors

Strong free cash flow generation

Consistent, sizable operating and free cash flow provides durable financial flexibility to fund R&D, go-to-market expansion, and debt reduction. Strong cash conversion reduces reliance on external financing, supports investment in recurring software offerings, and enables strategic optionality over the next 2–6 months.

Accelerating SaaS ARR and recurring revenue

Rapidly growing SaaS ARR and deferred recurring revenue signal a structural shift to higher-quality, sticky revenue. This improves revenue predictability, supports margin expansion over time through higher gross margins on subscriptions, and underpins sustainable ARR-driven growth into the medium term.

Upmarket wins and platform adoption

Strong enterprise deal velocity and platform adoption demonstrate competitive positioning and product-market fit at scale. Winning multimillion-dollar, upmarket contracts typically raises lifetime value, strengthens references, and supports long-term share gains versus incumbents across key verticals.

Negative Factors

Elevated financial leverage

High leverage amplifies downside risk and limits financial flexibility if revenue or margins slip. With debt over 3.5x equity, capital allocation choices and M&A optionality are constrained; volatility in earnings or cash flow could quickly pressure covenant metrics or force defensive actions.

Thin underlying profitability

Low net and EBIT margins mean operating leverage is limited and earnings are sensitive to mix or cost shifts. Even with revenue growth, modest profitability constrains free cash flow scalability and makes return metrics vulnerable to increased SG&A, service mix, or one-time charges over the coming months.

Margin headwinds from low‑margin services and component costs

A meaningful portion of near-term revenue comes from low-margin professional services tied to big deployments, and rising component costs compress product margins. Together these mix and cost pressures can limit sustainable gross margin improvement and delay flow‑through to operating profit.

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, 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 Money

Extreme Networks generates revenue through multiple streams, primarily from the sale of hardware, software, and services. Key revenue streams include the sale of network switches, routers, and wireless access points, which cater to organizations seeking robust networking solutions. Additionally, the company offers subscription-based software licenses for its management and analytics platforms, which provide ongoing revenue. Service and support contracts also contribute significantly to the company's earnings, providing maintenance, training, and technical support to clients. Strategic partnerships with other technology companies and service providers enhance its market reach and drive additional revenue opportunities, particularly in the cloud and managed services sectors.

Extreme Networks Financial Statement Overview

Summary

Mixed fundamentals: strong free cash flow and operating cash generation support resilience, but profitability is still thin (low net/EBIT margins) and the balance sheet remains highly leveraged with a limited equity cushion.

Income Statement

TTM (Trailing-Twelve-Months) results show modest top-line growth (revenue up 3.3%) and a solid gross margin (~60.7%), but profitability is thin with net margin ~0.8% and EBIT margin ~2.7%. The trajectory has improved versus FY2024 (loss-making) and FY2025 (near breakeven), yet earnings quality remains sensitive given the sharp swing from strong profitability in FY2023 to losses in FY2024.

Balance Sheet

Leverage remains elevated: in TTM (Trailing-Twelve-Months), debt is more than 3.5x equity, and equity is relatively small versus the asset base. Balance sheet risk has improved meaningfully from FY2024 (very high leverage), but the company is still operating with limited equity cushion, which can amplify volatility in returns (TTM return on equity ~12.1%).

Cash Flow

Cash generation is a clear strength: TTM (Trailing-Twelve-Months) operating cash flow (~$148M) and free cash flow (~$136M) are strong relative to reported net income, and free cash flow growth is robust (+43.1%). The main watch item is that the provided operating cash flow coverage figure remains low versus prior years, suggesting cash conversion/coverage metrics may be uneven even as absolute cash flow is healthy.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.14B	1.12B	1.31B	1.11B	1.01B
Gross Profit	709.13M	628.79M	752.67M	626.70M	573.41M
EBITDA	39.42M	-19.61M	158.62M	120.07M	110.09M
Net Income	-7.47M	-85.96M	78.07M	44.27M	1.94M
Balance Sheet
Total Assets	1.15B	1.04B	1.14B	1.07B	1.01B
Cash, Cash Equivalents and Short-Term Investments	231.75M	156.70M	234.83M	194.52M	246.89M
Total Debt	223.44M	250.15M	275.46M	365.09M	409.59M
Total Liabilities	1.09B	1.02B	1.02B	978.17M	955.63M
Stockholders Equity	65.58M	25.28M	116.75M	90.34M	54.47M
Cash Flow
Free Cash Flow	127.32M	37.37M	235.41M	112.74M	127.36M
Operating Cash Flow	152.03M	55.49M	249.21M	128.18M	144.53M
Investing Cash Flow	-24.71M	-18.12M	-13.80M	-84.95M	-17.18M
Financing Cash Flow	-52.59M	-114.98M	-194.78M	-94.66M	-74.78M

Extreme Networks Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 14.58
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EXTR, the sentiment is Negative. The current price of 14.58 is below the 20-day moving average (MA) of 15.55, below the 50-day MA of 16.51, and below the 200-day MA of 17.76, indicating a bearish trend. The MACD of -0.60 indicates Positive momentum. The RSI at 34.95 is Neutral, neither overbought nor oversold. The STOCH value of 27.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EXTR.

Extreme Networks Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DGII	68 Neutral	$1.62B	39.74	6.71%	―	1.46%	78.77%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
VIAV	60 Neutral	$5.66B	-128.94	-5.50%	―	15.60%	―
VSAT	58 Neutral	$6.11B	-11.28	-11.04%	―	1.23%	-31.80%
ADTN	57 Neutral	$738.67M	―	-48.44%	―	14.33%	83.32%
EXTR	54 Neutral	$1.96B	218.26	12.43%	―	14.31%	―

Extreme Networks Corporate Events

Extreme Networks Adds Ron Pasek to Board of Directors

On January 5, 2026, Extreme Networks, Inc. appointed Ron Pasek to its Board of Directors, granting him the company’s standard mix of cash retainers and equity compensation for non-employee directors, including a pro rata portion of the annual board and potential committee fees. Pasek also received a pro rata restricted stock unit award for 11,075 shares under the company’s 2013 Equity Incentive Plan, scheduled to vest at the next annual shareholder meeting or by November 12, 2026, and he entered into Extreme’s standard indemnification agreement for directors, underscoring the company’s typical governance and risk-protection framework without any disclosed related-party arrangements or special selection agreements.

The most recent analyst rating on (EXTR) stock is a Hold with a $18.50 price target. To see the full list of analyst forecasts on Extreme Networks stock, see the EXTR Stock Forecast page.

Extreme Networks Holds Annual Stockholders Meeting

On November 12, 2025, Extreme Networks, Inc. held its annual meeting of stockholders where several key proposals were voted on. Seven director nominees were elected for a one-year term, executive officer compensation was approved, Grant Thornton LLP was ratified as the independent auditor for the fiscal year ending June 30, 2026, and an amendment to the 2013 Equity Incentive Plan was approved, adding 6,800,000 shares for issuance. These decisions reflect the company’s strategic direction and governance priorities, potentially impacting its operational and financial strategies.

The most recent analyst rating on (EXTR) stock is a Buy with a $24.00 price target. To see the full list of analyst forecasts on Extreme Networks stock, see the EXTR Stock Forecast page.

Extreme Networks Announces 2026 Financial Guidance

On November 10, 2025, Extreme Networks announced its financial guidance for the fiscal year 2026, ending June 30, 2026, during its Investor Day. The company reaffirmed its fiscal second quarter 2026 outlook and provided detailed guidance for the full year, targeting total net revenue between $1,247 million and $1,264 million, with gross margins and operating margins outlined for both GAAP and non-GAAP measures. This announcement reflects Extreme Networks’ strategic positioning and expectations for continued growth, despite market conditions and competitive challenges.

The most recent analyst rating on (EXTR) stock is a Buy with a $25.00 price target. To see the full list of analyst forecasts on Extreme Networks stock, see the EXTR Stock Forecast page.