EXTREME NETWORKS INC (EXTR)
US30226D1063 - Common Stock
We assign a fundamental rating of 5 out of 10 to EXTR. EXTR was compared to 54 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 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
EXTR has a better Return On Assets (7.02%) than 87.04% of its industry peers.
EXTR has a better Return On Equity (74.12%) than 98.15% of its industry peers.
With an excellent Return On Invested Capital value of 18.02%, EXTR belongs to the best of the industry, outperforming 92.59% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for EXTR is in line with the industry average of 10.42%.
The 3 year average ROIC (11.08%) for EXTR is below the current ROIC(18.02%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.02% | ||
| ROE | 74.12% | ||
| ROIC | 18.02% |
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
The Profit Margin of EXTR (5.96%) is better than 81.48% of its industry peers.
With an excellent Operating Margin value of 9.47%, EXTR belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
In the last couple of years the Operating Margin of EXTR has grown nicely.
Looking at the Gross Margin, with a value of 59.63%, EXTR belongs to the top of the industry, outperforming 85.19% 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 | 9.47% | ||
| PM (TTM) | 5.96% | ||
| GM | 59.63% |
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
EXTR has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, EXTR has less shares outstanding
The number of shares outstanding for EXTR has been increased compared to 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 1.39, we must say that EXTR is in the distress zone and has some risk of bankruptcy.
EXTR has a better Altman-Z score (1.39) than 61.11% of its industry peers.
The Debt to FCF ratio of EXTR is 0.87, which is an excellent value as it means it would take EXTR, only 0.87 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 0.87, EXTR is doing good in the industry, outperforming 77.78% of the companies in the same industry.
EXTR has a Debt/Equity ratio of 1.69. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.69, EXTR is doing worse than 81.48% of the companies in the same industry.
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 | 1.69 | ||
| Debt/FCF | 0.87 | ||
| Altman-Z | 1.39 |
ROIC/WACC1.92
WACC9.41%
2.3 Liquidity
EXTR has a Current Ratio of 1.02. 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 1.02, EXTR is doing worse than 85.19% of the companies in the same industry.
EXTR has a Quick Ratio of 1.02. 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 85.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.02 | ||
| 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 45.78%, which is quite impressive.
The Earnings Per Share has been growing by 10.55% on average over the past years. This is quite good.
EXTR shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.09%.
EXTR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.95% yearly.
EPS 1Y (TTM)45.78%
EPS 3Y121.72%
EPS 5Y10.55%
EPS growth Q2Q-11.11%
Revenue 1Y (TTM)14.09%
Revenue growth 3Y11.45%
Revenue growth 5Y5.95%
Revenue growth Q2Q-6.89%
3.2 Future
Based on estimates for the next years, EXTR will show a small growth in Earnings Per Share. The EPS will grow by 2.18% on average per year.
EXTR is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -2.04% yearly.
EPS Next Y-47.12%
EPS Next 2Y-11.88%
EPS Next 3Y2.18%
EPS Next 5YN/A
Revenue Next Year-12.9%
Revenue Next 2Y-6.23%
Revenue Next 3Y-2.04%
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 decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 9.59 indicates a reasonable valuation of EXTR.
92.59% of the companies in the same industry are more expensive than EXTR, based on the Price/Earnings ratio.
EXTR's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.92.
A Price/Forward Earnings ratio of 13.70 indicates a correct valuation of EXTR.
Compared to the rest of the industry, the Price/Forward Earnings ratio of EXTR indicates a somewhat cheap valuation: EXTR is cheaper than 66.67% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.49, EXTR is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.59 | ||
| Fwd PE | 13.7 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, EXTR is valued a bit cheaper than the industry average as 77.78% of the companies are valued more expensively.
EXTR's Price/Free Cash Flow ratio is rather cheap when compared to the industry. EXTR is cheaper than 90.74% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.75 | ||
| EV/EBITDA | 9.04 |
4.3 Compensation for Growth
EXTR has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.91
EPS Next 2Y-11.88%
EPS Next 3Y2.18%
5. Dividend
5.1 Amount
No dividends for EXTR!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
EXTREME NETWORKS INC
NASDAQ:EXTR (4/26/2024, 5:49:19 PM)
After market: 11.6 0 (0%)11.6
+0.27 (+2.38%)
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 Cap1.49B
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)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
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 | 9.59 | ||
| Fwd PE | 13.7 | ||
| 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)N/A
PEG (5Y)0.91
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.02% | ||
| ROE | 74.12% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 9.47% | ||
| PM (TTM) | 5.96% | ||
| GM | 59.63% | ||
| 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 Turnover1.18
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.69 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.02 | ||
| Quick Ratio | 0.74 | ||
| 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)45.78%
EPS 3Y121.72%
EPS 5Y
EPS growth Q2Q
EPS Next Y-47.12%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)14.09%
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