EXTREME NETWORKS INC (EXTR) Stock Fundamental Analysis
USA - NASDAQ:EXTR - US30226D1063 - Common Stock
22.32 USD
-0.53 (-2.32%)
22.32 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to EXTR. 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 is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year EXTR was profitable.
In the past year EXTR had a positive cash flow from operations.
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
Looking at the Return On Assets, with a value of -0.65%, EXTR is in line with its industry, outperforming 50.00% of the companies in the same industry.
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.
Looking at the Return On Invested Capital, with a value of 2.58%, EXTR is in line with its industry, outperforming 56.25% of the companies in the same 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
Looking at the Operating Margin, with a value of 1.62%, EXTR is in line with its industry, outperforming 52.08% of the companies in the same industry.
In the last couple of years the Operating Margin of EXTR has declined.
The Gross Margin of EXTR (62.20%) is better 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), EXTR is destroying value.
Compared to 1 year ago, EXTR has more shares outstanding
EXTR has more shares outstanding than it did 5 years ago.
The debt/assets ratio for EXTR has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.46, we must say that EXTR is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of EXTR (1.46) is comparable to the rest of the industry.
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.
Looking at the Debt to Equity ratio, with a value of 2.50, EXTR is doing worse than 89.58% of the companies in the same industry.
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 | 1.46 |
ROIC/WACC0.26
WACC9.83%
2.3 Liquidity
A Current Ratio of 0.91 indicates that EXTR may have some problems paying its short term obligations.
With a Current ratio value of 0.91, EXTR is not doing good in the industry: 89.58% of the companies in the same industry are doing better.
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's Quick ratio of 0.74 is on the low side compared to the rest of the industry. EXTR is outperformed by 83.33% 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.
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.
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 26.57 indicates a quite expensive valuation of EXTR.
Based on the Price/Earnings ratio, EXTR is valued a bit cheaper than 64.58% of the companies in the same industry.
When comparing the Price/Earnings ratio of EXTR to the average of the S&P500 Index (27.30), we can say EXTR is valued inline with the index average.
With a Price/Forward Earnings ratio of 21.64, EXTR is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of EXTR indicates a somewhat cheap valuation: EXTR is cheaper than 60.42% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.73, EXTR is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.57 | ||
| Fwd PE | 21.64 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of EXTR is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, EXTR is valued a bit cheaper than the industry average as 62.50% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.18 | ||
| EV/EBITDA | 76.77 |
4.3 Compensation for Growth
EXTR's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
EXTR's earnings are expected to grow with 14.60% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.16
PEG (5Y)0.5
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 |
22.32
-0.53 (-2.32%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners93.66%
Inst Owner Change-0.64%
Ins Owners2.97%
Ins Owner Change6.36%
Market Cap2.95B
Analysts78.46
Price Target24.31 (8.92%)
Short Float %6.43%
Short Ratio6.23
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)24.89%
PT rev (3m)27.11%
EPS NQ rev (1m)0%
EPS NQ rev (3m)8.33%
EPS NY rev (1m)2.16%
EPS NY rev (3m)2.16%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.69%
Revenue NY rev (1m)0.88%
Revenue NY rev (3m)0.88%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.57 | ||
| Fwd PE | 21.64 | ||
| P/S | 2.59 | ||
| P/FCF | 23.18 | ||
| P/OCF | 19.41 | ||
| P/B | 44.99 | ||
| P/tB | N/A | ||
| EV/EBITDA | 76.77 |
EPS(TTM)0.84
EY3.76%
EPS(NY)1.03
Fwd EY4.62%
FCF(TTM)0.96
FCFY4.31%
OCF(TTM)1.15
OCFY5.15%
SpS8.62
BVpS0.5
TBVpS-2.58
PEG (NY)1.16
PEG (5Y)0.5
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 | 1.46 |
F-Score7
WACC9.83%
ROIC/WACC0.26
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 Year24.65%
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%