EXTREME NETWORKS INC (EXTR) Stock Fundamental Analysis
USA - NASDAQ:EXTR - US30226D1063 - Common Stock
20.29 USD
-0.15 (-0.73%)
20.45 USD
+0.16 (+0.79%)
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 decent growth rate and is not valued too expensively.
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.
In the past 5 years EXTR always reported a positive cash flow from operatings.
1.2 Ratios
EXTR has a Return On Assets (-0.65%) which is in line with its industry peers.
With a Return On Equity value of -11.39%, EXTR is not doing good in the industry: 60.42% of the companies in the same industry are doing better.
The Return On Invested Capital of EXTR (2.58%) is comparable to the rest of the industry.
| 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 (1.62%) which is in line with its industry peers.
EXTR's Operating Margin has declined in the last couple of years.
With an excellent Gross Margin value of 62.20%, EXTR belongs to the best of the industry, outperforming 81.25% of the companies in the same industry.
In the last couple of years the Gross Margin of EXTR has grown nicely.
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), EXTR is destroying value.
The number of shares outstanding for EXTR has been increased compared to 1 year ago.
EXTR has more shares outstanding than it did 5 years ago.
EXTR has a better debt/assets ratio than last year.
2.2 Solvency
EXTR has an Altman-Z score of 1.33. This is a bad value and indicates that EXTR is not financially healthy and even has some risk of bankruptcy.
EXTR has a Altman-Z score (1.33) which is in line with 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.
The Debt to FCF ratio of EXTR (1.40) is better than 68.75% of its industry peers.
EXTR has a Debt/Equity ratio of 2.50. This is a high value indicating a heavy dependency on external financing.
EXTR has a worse Debt to Equity ratio (2.50) than 91.67% of its industry peers.
Even though the debt/equity ratio score it not favorable for EXTR, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.5 | ||
| Debt/FCF | 1.4 | ||
| Altman-Z | 1.33 |
ROIC/WACC0.27
WACC9.57%
2.3 Liquidity
A Current Ratio of 0.91 indicates that EXTR may have some problems paying its short term obligations.
EXTR has a worse Current ratio (0.91) than 91.67% of its industry peers.
A Quick Ratio of 0.74 indicates that EXTR may have some problems paying 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
EXTR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 162.50%, which is quite impressive.
EXTR shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 53.06% yearly.
The Revenue has been growing slightly by 2.05% in the past year.
EXTR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.76% yearly.
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.
The Revenue is expected to grow by 5.95% on average over the next years.
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
A Price/Earnings ratio of 24.15 indicates a rather expensive valuation of EXTR.
Compared to the rest of the industry, the Price/Earnings ratio of EXTR indicates a somewhat cheap valuation: EXTR is cheaper than 66.67% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of EXTR to the average of the S&P500 Index (27.86), we can say EXTR is valued inline with the index average.
The Price/Forward Earnings ratio is 19.67, which indicates a rather expensive current valuation of EXTR.
66.67% of the companies in the same industry are more expensive than EXTR, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of EXTR to the average of the S&P500 Index (23.32), we can say EXTR is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.15 | ||
| Fwd PE | 19.67 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as EXTR.
68.75% of the companies in the same industry are more expensive than EXTR, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.3 | ||
| EV/EBITDA | 70.42 |
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)1.06
PEG (5Y)0.46
EPS Next 2Y21.93%
EPS Next 3Y14.6%
5. Dividend
5.1 Amount
EXTR does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
20.29
-0.15 (-0.73%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners94.34%
Inst Owner Change0%
Ins Owners3.25%
Ins Owner Change6.36%
Market Cap2.71B
Analysts78.46
Price Target24.31 (19.81%)
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 | 24.15 | ||
| Fwd PE | 19.67 | ||
| P/S | 2.38 | ||
| P/FCF | 21.3 | ||
| P/OCF | 17.84 | ||
| P/B | 41.35 | ||
| P/tB | N/A | ||
| EV/EBITDA | 70.42 |
EPS(TTM)0.84
EY4.14%
EPS(NY)1.03
Fwd EY5.08%
FCF(TTM)0.95
FCFY4.7%
OCF(TTM)1.14
OCFY5.61%
SpS8.53
BVpS0.49
TBVpS-2.55
PEG (NY)1.06
PEG (5Y)0.46
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 | 1.33 |
F-Score7
WACC9.57%
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%