Extreme Networks Inc

EXTR

Computer Communications Equipment

Mkt Cap

$1.481B

PE

-233.84

Debt

$189.9M

Cash

$151M

EV

$1.52B

FCF

$101.9M

Market Cap

$1.481B

P/E Ratio

-233.84

Debt

$189.9M

Cash

$151M

EV

$1.52B

FCF

$101.9M

Charts data: {"Earnings":[{"time":"2014-06-29","value":-57310000},{"time":"2015-06-29","value":-71643000},{"time":"2016-06-29","value":-31884000},{"time":"2017-06-29","value":-8517000},{"time":"2018-06-29","value":-46792000},{"time":"2019-06-29","value":-25853000},{"time":"2020-06-29","value":-126845000},{"time":"2021-06-29","value":1936000},{"time":"2022-06-29","value":44271000},{"time":"2023-06-29","value":78074000}],"Sales":[{"time":"2014-06-29","value":519554000},{"time":"2015-06-29","value":552940000},{"time":"2016-06-29","value":528389000},{"time":"2017-06-29","value":607084000},{"time":"2018-06-29","value":983142000},{"time":"2019-06-29","value":995789000},{"time":"2020-06-29","value":948019000},{"time":"2021-06-29","value":1009418000},{"time":"2022-06-29","value":1112321000},{"time":"2023-06-29","value":1312454000}],"Net Margins":[{"time":"2014-06-29","value":-0.1103061471954792},{"time":"2015-06-29","value":-0.12956740333490072},{"time":"2016-06-29","value":-0.06034190719337458},{"time":"2017-06-29","value":-0.014029360022665726},{"time":"2018-06-29","value":-0.047594345476035},{"time":"2019-06-29","value":-0.02596232736051513},{"time":"2020-06-29","value":-0.13380006096924218},{"time":"2021-06-29","value":0.0019179368705531305},{"time":"2022-06-29","value":0.039800561168943135},{"time":"2023-06-29","value":0.05948703725997254}],"Assets":[{"time":"2014-06-29","value":526432000},{"time":"2015-06-29","value":428660000},{"time":"2016-06-29","value":374849000},{"time":"2017-06-29","value":483346000},{"time":"2018-06-29","value":770248000},{"time":"2019-06-29","value":756874000},{"time":"2020-06-29","value":979088000},{"time":"2021-06-29","value":1010093000},{"time":"2022-06-29","value":1068510000},{"time":"2023-06-29","value":1141707000}],"Stockholders Equity":[{"time":"2014-06-29","value":156712000},{"time":"2015-06-29","value":104235000},{"time":"2016-06-29","value":90197000},{"time":"2017-06-29","value":106707000},{"time":"2018-06-29","value":112732000},{"time":"2019-06-29","value":115987000},{"time":"2020-06-29","value":5398000},{"time":"2021-06-29","value":54468000},{"time":"2022-06-29","value":90343000},{"time":"2023-06-29","value":116752000}],"ROE":[{"time":"2014-06-29","value":-0.36570269028536423},{"time":"2015-06-29","value":-0.6873219168225644},{"time":"2016-06-29","value":-0.35349290996374605},{"time":"2017-06-29","value":-0.0798166943124631},{"time":"2018-06-29","value":-0.4150729162970585},{"time":"2019-06-29","value":-0.22289566934225388},{"time":"2020-06-29","value":-23.498517969618376},{"time":"2021-06-29","value":0.03554380553719615},{"time":"2022-06-29","value":0.49003243195377616},{"time":"2023-06-29","value":0.6687165958613128}],"ROA":[{"time":"2014-06-29","value":-0.0954197313233238},{"time":"2015-06-29","value":-0.14695562916997154},{"time":"2016-06-29","value":-0.06522626444248217},{"time":"2017-06-29","value":-0.00018827092807222984},{"time":"2018-06-29","value":-0.04248501781244482},{"time":"2019-06-29","value":-0.01754188940299178},{"time":"2020-06-29","value":-0.09880827872469074},{"time":"2021-06-29","value":0.03403250987780333},{"time":"2022-06-29","value":0.060072437319257654},{"time":"2023-06-29","value":0.09486934914124202}]}

Extreme Networks, Inc. provides software-driven networking solutions worldwide. It designs, develops, and manufactures wired and wireless network infrastructure equipment; and develops software for network management, policy, analytics, security, and access controls. The company offers ExtremeCloud IQ, an ML/AI powered, wired, and wireless cloud network management solution that offers advanced visibility and control over users, devices, and applications; ExtremeCloud IQ Site Engine that provides task automation, access control, granular visibility with real-time analytics and multi-vendor device management; and ExtremeCloud IQ Essentials offers WIPS, location services, IoT, and guest management services. It also provides wireless access point products; ExtremeSwitching portfolio that includes access edge products that offer physical presentations along with options to deliver Ethernet or convergence-friendly Power-over-Ethernet (POE), including high-power universal POE; ExtremeCloud SD-WAN, a software-defined wide area networks solution offers an all-inclusive subscription, which includes hardware, the cloud-based SD-WAN service, support and maintenance, and customer success support; aggregation/core switches designed to address aggregation, top-of-rack, and campus core environments; and data center switches and routers. In addition, the company offers cloud native platforms and applications for service providers; and customer support and services. It markets and sells its products through distributors, resellers, and field sales organizations to healthcare, education, government, manufacturing, retail, and hospitality markets. Extreme Networks, Inc. was incorporated in 1996 and is headquartered in Morrisville, North Carolina.

Sector

10-Q
9/30/23
10-K
6/30/23
10-Q
3/31/23
10-Q
12/31/22
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9/30/22
10-K
6/30/22
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3/31/22
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12/31/21
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9/30/21
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6/30/21
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3/31/21
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12/31/20
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9/30/20
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3/31/20
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12/31/19
10-Q
9/30/19
10-K
6/30/19
10-Q
3/31/19
10-Q
12/31/18
10-Q
9/30/18
10-K
6/30/18
10-Q
3/31/18
10-Q
12/31/17

DCF

Discounted Cash Flow Valuation of Extreme Networks Inc

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$101.9M	$132.5M	$168.5M	$209.7M	$255.1M	$303.3M	$352.2M	$399.2M	$441.3M	$475.6M	$499.4M	$4.994B
DCF		$115.2M	$127.4M	$137.9M	$145.9M	$150.8M	$152.3M	$150.1M	$144.3M	$135.2M	$123.4M	$1.234B
Value	$2.617B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 93%

Earnings Stability -19%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	06-2015	06-2016	06-2017	06-2018	06-2019	06-2020	06-2021	06-2022	06-2023	TTM
Net Margin	-13%	-6%	-1.4%	-4.8%	-2.6%	-13%	0.19%	4%	5.9%	-0.52%
ROA	-15%	-6.5%	-0.019%	-4.2%	-1.8%	-9.9%	3.4%	6%	9.5%	2%
ROE	-69%	-35%	-8%	-42%	-22%	-2.3K%	3.6%	49%	67%	-9.8%

What is the average Net Margin?

The average Net Margin over the past 5 years is -1.77%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +2.48%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +0.5%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +3.01%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is -382.37%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +88.83%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

Data are missing

Years	06-2015	06-2016	06-2017	06-2018	06-2019	06-2020	06-2021	06-2022	06-2023	TTM
Debt FCF	2.59	2.93	2.17	-9.78	2.31	21.21	2.91	3.03	1.10	1.86
Debt Equity	0.75	0.81	0.99	1.85	1.63	81.01	6.80	3.79	2.22	2.92
MIN
Graham Stability	-	-	-	-	-	-	-	-	-	-

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 1.86.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 1.09.

What is the Graham’s Stability?

Graham’s Stability measure stands at -.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	06-2016	06-2018	06-2020	06-2022	Trend
Revenue	14%	5.9%	11%	18%	0.11%
Net Income	-	-	-	76%	-2.1K%
Stockholders Equity	3.8%	0.7%	180%	29%	36%
FCF	38%	-	130%	110%	18%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +5.95%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +0.11%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -2.11K%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +0.7%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +36.16%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +18.22%.