Extreme Networks, Inc. (EXTR)
Valuation Overview•Is Extreme Networks, Inc. Overvalued or Undervalued?
Trading at a discount compared to peers, but the underlying intrinsic cash flows struggle to support the current price.
Moderate quality score of 55/100, reflecting stable operating margins and manageable leverage.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: Average quality business weighed down by significant solvency concerns.
Wall Street is broadly bullish, projecting solid upside alongside robust expected earnings growth. However, capital return yields remain modest, driven predominantly by aggressive share repurchases.
Returns capital exclusively via buybacks — no active dividend
EXTR demonstrates strong business quality with robust profitability and healthy margins. This is backed by a fortress balance sheet, holding significant net cash ($8M) and minimal debt risk.
The company exhibits steady, low-single-digit revenue growth paired with stable bottom-line earnings. However, profitability remains a major concern with severely compressed operating margins (3.2%).
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $316.9M | +2.0% | +0.8% | +3.8% | +7.5% | |
| EBITDA | $23.7M | — | -34.4% | — | — | |
| Net Income | $10.6M | +91.3% | — | — | +20.2% | |
| EPS (Diluted) | $0.08 | +91.5% | — | — | +22.5% | |
| Free Cash Flow | $28.1M | +240.7% | +4.1% | +43.9% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 61.3% | 58.6% | 57.8% | 55.2% |
| Operating Margin | 3.2% | 2.5% | 3.6% | 1.7% |
| Net Margin | 1.3% | -0.8% | 0.4% | -2.6% |
| FCF Margin | 11.1% | 10.8% | 11.0% | 7.6% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.24 | $0.26 | +8.3% | ||
| Q1'26 | $0.24 | $0.26 | +8.3% | ||
| Q4'25 | $0.22 | $0.22 | +0.0% | ||
| Q3'25 | $0.22 | $0.25 | +13.6% | ||
| Q2'25 | $0.19 | $0.21 | +10.5% | ||
| Q1'25 | $0.18 | $0.21 | +16.7% | ||
| Q4'24 | $0.12 | $0.17 | +41.7% | ||
| Q3'24 | $0.13 | $-0.08 | -161.5% |
Total return is +89.2% (1Y), outperforming the benchmark by +64.2%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +89.7% | +80.4% | — |
| 1Y | +89.2% | +64.2% | — |
| 3YCAGR | +8.5% | -11.7% | — |
| 5YCAGR | +24.7% | +10.2% | — |
| 10YCAGR | +24.2% | +10.6% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Extreme Networks, Inc. (EXTR) valuation, health, and returns.
Extreme Networks, Inc. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Slightly cheap versus peers compared to industry peers. overvalued (implying -43.5% downside from DCF intrinsic value of $17.74)
Extreme Networks, Inc. has multiple valuation anchors: DCF Intrinsic Value: $17.74 | Peer Relative Fair Value: $35.08 | Wall Street Analyst Target: $33.67 (implying +7.3% upside). A convergence of these signals offers higher conviction.
Extreme Networks, Inc. displays fair financial health with a composite quality score of 55/100, supported by a Altman Z-Score of 1.7 (distress zone), Piotroski F-Score of 6/9, Return on Invested Capital (ROIC) of 14.4%.
Extreme Networks, Inc. returns capital via buybacks instead of dividends, carrying a 0.9% buyback yield and reducing outstanding shares by +2.4% in the last 12 months.
Extreme Networks, Inc.'s current growth trajectory is Stable. The company achieved +2.0% 1Y revenue growth and +91.5% 1Y EPS growth, compared to its 3Y revenue CAGR of +0.8%.
Wall Street consensus is Buy based on 18 analysts, beating EPS expectations in 67% of recent quarters with a 2-quarter streak. The consensus price target represents a +7.3% change from current levels.
Investment risks for Extreme Networks, Inc. include: -39.9% 1-year max drawdown, high beta (1.51x market volatility), elevated distress risk. Volatility risk is characterized by a beta of 1.51x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.