Extreme Networks (EXTR)
NASDAQ:EXTR
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Extreme Networks
(NASDAQ:EXTR)
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Rating:54Neutral
Price Target:
$15.50
▼(-6.06% Downside)
Action:ReiteratedDate:01/29/26
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.
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.
Read all positive and negative factors
Positive Factors
Negative 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.
Read all positive factors
Extreme Networks (EXTR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.22B
Dividend YieldN/A
Average Volume (3M)1.35M
Price to Earnings (P/E)70.5
Beta (1Y)1.68
Revenue Growth14.31%
EPS GrowthN/A
CountryUS
Employees2,656
SectorTechnology
Sector Strength88
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.26
Shares Outstanding134,269,550
10 Day Avg. Volume1,059,305
30 Day Avg. Volume1,350,033
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 Cap1.00
Enterprise Value/Revenue1.81
Enterprise Value/Gross Profit2.95
Enterprise Value/Ebitda39.98
Forecast
1Y Price Target
$23.29Price Target Upside41.15% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)1
Revenue Forecast (FY)$1.27B
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 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 s...
Extreme Networks Earnings Call Summary
Earnings Call Date:Jan 28, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call presents a strongly positive operational and financial trajectory: double-digit revenue growth, accelerating SaaS ARR, record subscription bookings, improved gross and operating margins, significant free cash flow and adjusted EBITDA, and a clear pipeline of large upmarket wins. Near-term margin pressure is being acknowledged and quantified primarily from low-margin professional services related to several large implementations and ongoing component cost inflation. Management has taken price and supply actions and expects product margins to improve in H2, with long-term gross margin targets reiterated. On balance the favorable growth, recurring revenue strength, market share gains, and cash generation substantially outweigh the near-term mix and supply challenges.Positive Updates
Revenue Growth and Guidance Upside
Total revenue of $318 million in Q2, up 14% year over year, exceeding the high end of guidance. Full fiscal 2026 revenue guidance raised to a range of $1.262 billion to $1.270 billion (midpoint implies ~11% YoY growth), representing a $10 million increase at the midpoint vs prior guidance.
Negative Updates
Near-Term Margin Headwind from Large Professional Services Installations
Several multimillion-dollar deployments scheduled for Q3 and Q4 require the company to run installations with its professional services team. Management expects these implementations to carry materially lower margins than subscription and support, pressuring Q3 gross margin guidance to 61.0%–61.4% and reducing mix in the near term.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth and Guidance Upside
Total revenue of $318 million in Q2, up 14% year over year, exceeding the high end of guidance. Full fiscal 2026 revenue guidance raised to a range of $1.262 billion to $1.270 billion (midpoint implies ~11% YoY growth), representing a $10 million increase at the midpoint vs prior guidance.
Read all positive updates
Company Guidance
The company guided Q3 revenue of $309M–$314M with gross margin of 61.0%–61.4%, operating margin of 13.6%–14.8%, EPS of $0.23–$0.25 and a diluted share count of ~136M; for fiscal 2026 it raised full‑year revenue guidance to $1.262B–$1.270B (midpoint implying ~11% YoY growth) and EPS to $0.98–$1.02, while reiterating expectations to grow profitability faster than revenue (roughly 20% profitability growth on double‑digit revenue growth), targeting a long‑term gross margin of 64%–66% and citing a Q2 exit position of >$200M annualized EBITDA and a healthy net cash position — context for the guide includes Q2 results: revenue $318M (+14% YoY), EPS $0.26 (+24% YoY), non‑GAAP gross margin 62% (+70 bps), adjusted EBITDA $52.4M (16.5% margin), free cash flow $43M, SaaS ARR $227M (+25% YoY), subscription & support $120M (+12% YoY), SaaS deferred revenue $334M (+15% YoY) and total deferred recurring revenue $628M (+9% YoY).Extreme Networks Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
38
Negative
Cash Flow
72
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.22B | 1.14B | 1.12B | 1.31B | 1.11B | 1.01B |
| Gross Profit | 747.61M | 709.13M | 628.79M | 752.67M | 626.70M | 573.41M |
| EBITDA | 55.22M | 39.42M | -19.61M | 158.62M | 120.07M | 110.09M |
| Net Income | 9.14M | -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 | 219.79M | 231.75M | 156.70M | 234.83M | 194.52M | 246.89M |
| Total Debt | 212.12M | 223.44M | 250.15M | 275.46M | 365.09M | 409.59M |
| Total Liabilities | 1.07B | 1.09B | 1.02B | 1.02B | 978.17M | 955.63M |
| Stockholders Equity | 95.91M | 65.58M | 25.28M | 116.75M | 90.34M | 54.47M |
Cash Flow | ||||||
| Free Cash Flow | 135.66M | 127.32M | 37.37M | 235.41M | 112.74M | 127.36M |
| Operating Cash Flow | 148.05M | 152.03M | 55.49M | 249.21M | 128.18M | 144.53M |
| Investing Cash Flow | -26.31M | -24.71M | -18.12M | -13.80M | -84.95M | -17.18M |
| Financing Cash Flow | -72.59M | -52.59M | -114.98M | -194.78M | -94.66M | -74.78M |
Extreme Networks Technical Analysis
Positive
16.50
Price Trends
14.73
Positive
15.74
Positive
17.71
Negative
Market Momentum
0.32
Negative
72.42
Negative
84.67
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 16.5 is above the 20-day moving average (MA) of 15.14, above the 50-day MA of 14.73, and below the 200-day MA of 17.71, indicating a neutral trend. The MACD of 0.32 indicates Negative momentum. The RSI at 72.42 is Negative, neither overbought nor oversold. The STOCH value of 84.67 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 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 |
|---|---|---|---|---|---|---|---|
76 Outperform | $2.04B | 34.52 | 6.76% | ― | 1.46% | 78.77% | |
64 Neutral | $1.11B | -15.18 | -30.65% | ― | 14.33% | 83.32% | |
63 Neutral | $9.58B | -21.27 | -5.44% | ― | 15.60% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $7.65B | 44.93 | -7.45% | ― | 1.23% | -31.80% | |
54 Neutral | $2.22B | 70.53 | 12.12% | ― | 14.31% | ― |
* Technology Sector Average
EXTR
Extreme Networks
16.50
4.22
34.36%
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13.73
5.52
67.24%
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VIAV
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306.78%
Extreme Networks Corporate Events
Executive/Board Changes
Extreme Networks Adds Ron Pasek to Board of Directors
Neutral
Jan 7, 2026
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 annua...
Business Operations and StrategyShareholder Meetings
Extreme Networks Holds Annual Stockholders Meeting
Neutral
Nov 13, 2025
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 L...
Business Operations and StrategyFinancial Disclosures
Extreme Networks Announces 2026 Financial Guidance
Positive
Nov 10, 2025
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 f...
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.