EXTREME NETWORKS INC (EXTR) Stock Fundamental Analysis
USA - NASDAQ:EXTR - US30226D1063 - Common Stock
19.92 USD
-0.02 (-0.1%)
19.93 USD
+0.01 (+0.05%)
Taking everything into account, EXTR scores 4 out of 10 in our fundamental rating. EXTR was compared to 48 industry peers in the Communications Equipment industry. While EXTR is still in line with the averages on profitability rating, there are concerns on its financial health. EXTR has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year EXTR was profitable.
EXTR had a positive operating cash flow in the past year.
In multiple years EXTR reported negative net income over the last 5 years.
EXTR had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of EXTR (-0.65%) is comparable to the rest of the industry.
EXTR has a Return On Equity of -11.39%. This is in the lower half of the industry: EXTR underperforms 60.42% of its industry peers.
EXTR has a Return On Invested Capital (2.58%) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.65% | ||
| ROE | -11.39% | ||
| ROIC | 2.58% |
ROA(3y)-0.68%
ROA(5y)0.46%
ROE(3y)-94.85%
ROE(5y)-46.4%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
EXTR has a Operating Margin of 1.62%. This is comparable to the rest of the industry: EXTR outperforms 52.08% of its industry peers.
EXTR's Operating Margin has declined in the last couple of years.
EXTR has a better Gross Margin (62.20%) than 81.25% of its industry peers.
EXTR's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.62% | ||
| PM (TTM) | N/A | ||
| GM | 62.2% |
OM growth 3Y-37.3%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y3.18%
GM growth 5Y2.63%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so EXTR is destroying value.
Compared to 1 year ago, EXTR has more shares outstanding
The number of shares outstanding for EXTR has been increased compared to 5 years ago.
EXTR has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.30, we must say that EXTR is in the distress zone and has some risk of bankruptcy.
EXTR's Altman-Z score of 1.30 is in line compared to the rest of the industry. EXTR outperforms 52.08% of its industry peers.
EXTR has a debt to FCF ratio of 1.40. This is a very positive value and a sign of high solvency as it would only need 1.40 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 1.40, EXTR is doing good in the industry, outperforming 68.75% of the companies in the same industry.
A Debt/Equity ratio of 2.50 is on the high side and indicates that EXTR has dependencies on debt financing.
EXTR's Debt to Equity ratio of 2.50 is on the low side compared to the rest of the industry. EXTR is outperformed by 91.67% of its industry peers.
Although EXTR does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.5 | ||
| Debt/FCF | 1.4 | ||
| Altman-Z | 1.3 |
ROIC/WACC0.27
WACC9.39%
2.3 Liquidity
EXTR has a Current Ratio of 0.91. This is a bad value and indicates that EXTR is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.91, EXTR is doing worse than 91.67% of the companies in the same industry.
EXTR has a Quick Ratio of 0.91. This is a bad value and indicates that EXTR is not financially healthy enough and could expect problems in meeting its short term obligations.
EXTR has a Quick ratio of 0.74. This is amonst the worse of the industry: EXTR underperforms 85.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.74 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 162.50% over the past year.
EXTR shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 53.06% yearly.
Looking at the last year, EXTR shows a small growth in Revenue. The Revenue has grown by 2.05% in the last year.
Measured over the past years, EXTR shows a small growth in Revenue. The Revenue has been growing by 3.76% on average per year.
EPS 1Y (TTM)162.5%
EPS 3Y2.5%
EPS 5Y53.06%
EPS Q2Q%412.5%
Revenue 1Y (TTM)2.05%
Revenue growth 3Y0.83%
Revenue growth 5Y3.76%
Sales Q2Q%19.6%
3.2 Future
EXTR is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.60% yearly.
EXTR is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.95% yearly.
EPS Next Y22.82%
EPS Next 2Y21.93%
EPS Next 3Y14.6%
EPS Next 5YN/A
Revenue Next Year8.74%
Revenue Next 2Y8.11%
Revenue Next 3Y5.95%
Revenue Next 5YN/A
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 23.71, EXTR is valued on the expensive side.
Based on the Price/Earnings ratio, EXTR is valued a bit cheaper than 64.58% of the companies in the same industry.
EXTR is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.50, which is the current average of the S&P500 Index.
EXTR is valuated rather expensively with a Price/Forward Earnings ratio of 19.31.
66.67% of the companies in the same industry are more expensive than EXTR, based on the Price/Forward Earnings ratio.
EXTR's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.99.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.71 | ||
| Fwd PE | 19.31 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as EXTR.
EXTR's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. EXTR is cheaper than 70.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.91 | ||
| EV/EBITDA | 69.18 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as EXTR's earnings are expected to grow with 14.60% in the coming years.
PEG (NY)1.04
PEG (5Y)0.45
EPS Next 2Y21.93%
EPS Next 3Y14.6%
5. Dividend
5.1 Amount
No dividends for EXTR!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
19.92
-0.02 (-0.1%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners94.34%
Inst Owner Change0.05%
Ins Owners3.25%
Ins Owner Change6.36%
Market Cap2.66B
Analysts78.46
Price Target24.31 (22.04%)
Short Float %6.06%
Short Ratio5.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.41%
Min EPS beat(2)8.93%
Max EPS beat(2)11.89%
EPS beat(4)4
Avg EPS beat(4)18.41%
Min EPS beat(4)8.93%
Max EPS beat(4)38.07%
EPS beat(8)5
Avg EPS beat(8)-11.1%
EPS beat(12)9
Avg EPS beat(12)-4.04%
EPS beat(16)13
Avg EPS beat(16)1%
Revenue beat(2)1
Avg Revenue beat(2)-0.06%
Min Revenue beat(2)-0.5%
Max Revenue beat(2)0.37%
Revenue beat(4)2
Avg Revenue beat(4)-0.08%
Min Revenue beat(4)-1.5%
Max Revenue beat(4)1.3%
Revenue beat(8)3
Avg Revenue beat(8)-0.22%
Revenue beat(12)7
Avg Revenue beat(12)0.82%
Revenue beat(16)10
Avg Revenue beat(16)0.89%
PT rev (1m)0%
PT rev (3m)24.89%
EPS NQ rev (1m)0%
EPS NQ rev (3m)8.33%
EPS NY rev (1m)0%
EPS NY rev (3m)2.16%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.69%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.88%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.71 | ||
| Fwd PE | 19.31 | ||
| P/S | 2.34 | ||
| P/FCF | 20.91 | ||
| P/OCF | 17.51 | ||
| P/B | 40.59 | ||
| P/tB | N/A | ||
| EV/EBITDA | 69.18 |
EPS(TTM)0.84
EY4.22%
EPS(NY)1.03
Fwd EY5.18%
FCF(TTM)0.95
FCFY4.78%
OCF(TTM)1.14
OCFY5.71%
SpS8.53
BVpS0.49
TBVpS-2.55
PEG (NY)1.04
PEG (5Y)0.45
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.65% | ||
| ROE | -11.39% | ||
| ROCE | 3.26% | ||
| ROIC | 2.58% | ||
| ROICexc | 4.45% | ||
| ROICexgc | N/A | ||
| OM | 1.62% | ||
| PM (TTM) | N/A | ||
| GM | 62.2% | ||
| FCFM | 11.17% |
ROA(3y)-0.68%
ROA(5y)0.46%
ROE(3y)-94.85%
ROE(5y)-46.4%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y-33.94%
ROICexc growth 5YN/A
OM growth 3Y-37.3%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y3.18%
GM growth 5Y2.63%
F-Score7
Asset Turnover0.99
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.5 | ||
| Debt/FCF | 1.4 | ||
| Debt/EBITDA | 4.35 | ||
| Cap/Depr | 128.59% | ||
| Cap/Sales | 2.17% | ||
| Interest Coverage | 1.25 | ||
| Cash Conversion | 403.7% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.74 | ||
| Altman-Z | 1.3 |
F-Score7
WACC9.39%
ROIC/WACC0.27
Cap/Depr(3y)76.56%
Cap/Depr(5y)59.82%
Cap/Sales(3y)1.61%
Cap/Sales(5y)1.59%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)162.5%
EPS 3Y2.5%
EPS 5Y53.06%
EPS Q2Q%412.5%
EPS Next Y22.82%
EPS Next 2Y21.93%
EPS Next 3Y14.6%
EPS Next 5YN/A
Revenue 1Y (TTM)2.05%
Revenue growth 3Y0.83%
Revenue growth 5Y3.76%
Sales Q2Q%19.6%
Revenue Next Year8.74%
Revenue Next 2Y8.11%
Revenue Next 3Y5.95%
Revenue Next 5YN/A
EBIT growth 1Y163.82%
EBIT growth 3Y-36.78%
EBIT growth 5YN/A
EBIT Next Year28.77%
EBIT Next 3Y16.33%
EBIT Next 5YN/A
FCF growth 1Y240.74%
FCF growth 3Y4.12%
FCF growth 5Y43.95%
OCF growth 1Y174%
OCF growth 3Y5.85%
OCF growth 5Y33.47%