Extreme Networks Inc (EXTR) stock analysis

P/E above its 5-year median

Extreme Networks's P/E of 68.4 is above its own 5-year median of 53.6.

P/E above the industry

Extreme Networks's P/E of 68.4 is above the Computer and Office Equipment median of 26.0.

EV/EBITDA above its 5-year median

Extreme Networks's EV/EBITDA of 46.4 is above its 5-year median of 37.6.

P/B above the industry

Extreme Networks's price-to-book of 39.77 is above the Computer and Office Equipment median of 3.71.

Trading above fair value

The share price of $26.67 is above our fair value estimate of $14.38.

Margin of safety under 20%

The price is 85.5% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -0.7% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -18.8% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 507% over the last twelve months, against a 5-year average of 85.1% a year.

Growing faster than the industry

Revenue grew 11.3% over the last twelve months; the Computer and Office Equipment median is 11.2%.

Guidance raised

Extreme Networks raised its full year fiscal 2026 Total net revenue outlook on Apr 29, 2026.

Gross margin improving

Gross margin was 61.9% over the last twelve months, against 61.6% a year earlier.

Return on equity under 15%

Return on equity was 67.1% over the last twelve months and averaged 10.7% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 124%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Extreme Networks's return on equity of 67.1% is above the Computer and Office Equipment median of 7.5%.

Earnings grew over 5 years

Net income grew 85.1% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 4.0% over the last twelve months, against a 5-year average of 1.0%.

Net margin above the industry

Extreme Networks's net margin of 4.0% is above the Computer and Office Equipment median of 3.8%.

High debt

Debt is 227% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 623% five years ago to 227%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 91.3% of total debt.

Interest not well covered

Operating income covers interest expense 4.9 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.02 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 1.98; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Extreme Networks has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.