Extreme Networks Stock Analysis, Valuation (NASDAQ:EXTR)

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$8.99 $0.01 (0.11%) EXTR stock closing price May 25, 2018 (Closing)
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Extreme Networks
Updated on : May 25, 2018
previous close
EXTR 9 (0%)
NASDAQ 7433.9 (0%)
Closing Price On: May 25, 2018
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Computer-Networks
Sector :
Computer and Technology
5 Quarter Revenue
Revenue Growth
2018-Q3
$million
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
23.5%
Operating Profit
Operating Margin:
-2.3%
Sector Average:
5.4%
5 Quarter Net Profit
Net Margins
2018-Q3
%
LTM Margin
Debt/Equity Ratio
Debt:
178.7M
Debt/Equity Ratio:
 1.58
Compared to the industry
Cash Flow
Operating cash flow:
-$16M
Net Income:
-$13.6M
PROS      CONS
Recent Growth
Long Term Growth
PE Valuation
PS Valuation
Operating Margins
Net Margins
High Debt Burden
ROIC
ROE
FCF Margin
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
EXTR PS :
1.2
Industry PS :
2.9
Sector:   Computer and Technology.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
-8.2%
Return on Equity:
-26.1%
Free Cash Flow Margin:
-9.4%
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Extreme Networks Stock Analysis

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Watch the robo advisor video of Extreme Networks stock analysis on Amigobulls. Our analyst opinion covering the buy and sell arguments for EXTR stock is shown in the video.

Note: Amigobulls stock rating is our opinion based on the historical performance of the company's fundamentals. It is not indicative of the future performance of the stock.

Extreme Networks, Inc Stock Rating 2/5

Amigobulls EXTR stock analysis uses latest quarter 2018 Q3 financial data like Extreme Networks revenue growth, profit margins and cash flows. Extreme Networks valuation forms a crucial part of our stock analysis. Based on a company's historical fundamentals we arrive at Extreme Networks stock rating which is indicative of the company's financial performance.

Should you buy EXTR stock?

  • The Year Over Year (YoY) revenue growth for Extreme Networks was 76.2% in 2018 Q3.
  • Long term revenue growth has been strong with a 5 year compounded annual growth of 23.5%.
  • The price to earnings multiple of 20 is attractive when compared with the industry average PE ratio of 24.8.
  • The lower PS ratio 1.2 for EXTR stock versus Computer-Networks industry average of 2.9 is a positive for the company.

Should you sell EXTR stock?

  • Extreme Networks reported an average operating margin of -2.3% over the Last Twelve Months (LTM).
  • Extreme Networks posted an average Net loss of -3.3% in the last twelve months.
  • With a debt/equity ratio of  1.58, Extreme Networks is highly leveraged in comparison to Computer and Technology peers.
  • Extreme Networks has a negative ROIC (Return on Invested Capital) of -8.2%.
  • A negative ROE of -26.1% indicates that the company is not able to generate profits with the money shareholders have invested.
  • The company has negative Free Cash Flows (FCF), with a negative FCF margin of -9.4%.

Comments on this video and Extreme Networks stock

Amigobulls Extreme Networks stock analysis helps in evaluating the financial statements of a company to arrive at a conclusion about the fair value of EXTR stock. Company's fundamentals remain one of the key driver of EXTR stock and helps investors in making good buy and sell decision.

While doing a study of the company financials, Extreme Networks revenue growth and profit or net income are two main metrics which help in identifying whether EXTR stock is overvalued or undervalued. One can also combine technical analysis and fundamental analysis to get a holistic picture about EXTR stock.