EXTREME NETWORKS INC (EXTR)
US30226D1063 - Common Stock
EXTR gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 59 industry peers in the Communications Equipment industry. EXTR has an excellent profitability rating, but there are some minor concerns on its financial health. EXTR has both an excellent growth and valuation score. This means it is growing and it is still cheap. This is a rare combination! These ratings could make EXTR a good candidate for value and growth investing.
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
EXTR has a better Return On Assets (8.50%) than 84.75% of its industry peers.
EXTR has a Return On Equity of 86.73%. This is amongst the best in the industry. EXTR outperforms 98.31% of its industry peers.
EXTR has a better Return On Invested Capital (19.16%) than 93.22% of its industry peers.
EXTR had an Average Return On Invested Capital over the past 3 years of 11.08%. This is in line with the industry average of 10.96%.
The last Return On Invested Capital (19.16%) for EXTR is above the 3 year average (11.08%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.5% | ||
| ROE | 86.73% | ||
| ROIC | 19.16% |
ROA(3y)3.72%
ROA(5y)-1.04%
ROE(3y)39.8%
ROE(5y)-450.21%
ROIC(3y)11.08%
ROIC(5y)N/A
1.3 Margins
EXTR has a Profit Margin of 6.88%. This is in the better half of the industry: EXTR outperforms 79.66% of its industry peers.
EXTR's Operating Margin of 9.64% is amongst the best of the industry. EXTR outperforms 81.36% of its industry peers.
EXTR's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 58.55%, EXTR belongs to the best of the industry, outperforming 86.44% of the companies in the same industry.
In the last couple of years the Gross Margin of EXTR has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.64% | ||
| PM (TTM) | 6.88% | ||
| GM | 58.55% |
OM growth 3YN/A
OM growth 5Y28.56%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y1.73%
GM growth 5Y1.13%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), EXTR is creating value.
Compared to 1 year ago, EXTR has less shares outstanding
Compared to 5 years ago, EXTR has more shares outstanding
The debt/assets ratio for EXTR has been reduced compared to a year ago.
2.2 Solvency
EXTR has an Altman-Z score of 1.91. This is not the best score and indicates that EXTR is in the grey zone with still only limited risk for bankruptcy at the moment.
EXTR has a Altman-Z score of 1.91. This is in the better half of the industry: EXTR outperforms 69.49% of its industry peers.
The Debt to FCF ratio of EXTR is 0.75, which is an excellent value as it means it would take EXTR, only 0.75 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of EXTR (0.75) is better than 79.66% of its industry peers.
EXTR has a Debt/Equity ratio of 1.71. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of EXTR (1.71) is worse than 79.66% 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 | 1.71 | ||
| Debt/FCF | 0.75 | ||
| Altman-Z | 1.91 |
ROIC/WACC2.22
WACC8.62%
2.3 Liquidity
EXTR has a Current Ratio of 1.01. This is a normal value and indicates that EXTR is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.01, EXTR is doing worse than 83.05% of the companies in the same industry.
A Quick Ratio of 0.82 indicates that EXTR may have some problems paying its short term obligations.
With a Quick ratio value of 0.82, EXTR is not doing good in the industry: 74.58% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.82 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 61.04% over the past year.
EXTR shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.55% yearly.
Looking at the last year, EXTR shows a quite strong growth in Revenue. The Revenue has grown by 19.74% in the last year.
Measured over the past years, EXTR shows a small growth in Revenue. The Revenue has been growing by 5.95% on average per year.
EPS 1Y (TTM)61.04%
EPS 3Y121.72%
EPS 5Y10.55%
EPS growth Q2Q75%
Revenue 1Y (TTM)19.74%
Revenue growth 3Y11.45%
Revenue growth 5Y5.95%
Revenue growth Q2Q18.61%
3.2 Future
The Earnings Per Share is expected to grow by 21.66% on average over the next years. This is a very strong growth
Based on estimates for the next years, EXTR will show a quite strong growth in Revenue. The Revenue will grow by 8.21% on average per year.
EPS Next Y29.2%
EPS Next 2Y24.69%
EPS Next 3Y21.66%
EPS Next 5YN/A
Revenue Next Year7.51%
Revenue Next 2Y8.13%
Revenue Next 3Y8.21%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 13.72 indicates a correct valuation of EXTR.
EXTR's Price/Earnings ratio is a bit cheaper when compared to the industry. EXTR is cheaper than 67.80% of the companies in the same industry.
When comparing the Price/Earnings ratio of EXTR to the average of the S&P500 Index (24.54), we can say EXTR is valued slightly cheaper.
The Price/Forward Earnings ratio is 10.04, which indicates a very decent valuation of EXTR.
Compared to the rest of the industry, the Price/Forward Earnings ratio of EXTR indicates a rather cheap valuation: EXTR is cheaper than 84.75% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.22. EXTR is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.72 | ||
| Fwd PE | 10.04 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EXTR is valued a bit cheaper than 66.10% of the companies in the same industry.
EXTR's Price/Free Cash Flow ratio is rather cheap when compared to the industry. EXTR is cheaper than 91.53% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.48 | ||
| EV/EBITDA | 13.22 |
4.3 Compensation for Growth
EXTR's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
EXTR has an outstanding profitability rating, which may justify a higher PE ratio.
EXTR's earnings are expected to grow with 21.66% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.47
PEG (5Y)1.3
EPS Next 2Y24.69%
EPS Next 3Y21.66%
5. Dividend
5.1 Amount
No dividends for EXTR!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
EXTREME NETWORKS INC
NASDAQ:EXTR (12/8/2023, 7:00:02 PM)
After market: 17.1 +0.09 (+0.53%)17.01
+0.68 (+4.16%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap2.20B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.72 | ||
| Fwd PE | 10.04 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.47
PEG (5Y)1.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.5% | ||
| ROE | 86.73% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 9.64% | ||
| PM (TTM) | 6.88% | ||
| GM | 58.55% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.24
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.71 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.82 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)61.04%
EPS 3Y121.72%
EPS 5Y
EPS growth Q2Q
EPS Next Y29.2%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)19.74%
Revenue growth 3Y11.45%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y