Extreme Networks (NASDAQ:EXTR) Stock Keeps "Buy" Rating at Rosenblatt Securities

Key Points

• Rosenblatt Securities reaffirmed its “Buy” rating on Extreme Networks with a $38 price target, implying 55.48% upside from the reported $24.44 share price. The broader analyst consensus is “Moderate Buy,” with an average target of $32.25.
• Extreme Networks exceeded quarterly expectations, reporting adjusted EPS of $0.33 versus the $0.28 consensus and revenue of $341.1 million, up 10% year over year. Platform ONE subscription bookings and SaaS annual recurring revenue also posted strong growth.
• Risks include valuation and insider activity: the stock trades at a high earnings multiple, while company insiders sold 121,825 shares worth approximately $3.1 million over the prior 90 days. The company also agreed to pay about $976,000 to resolve a Justice Department investigation.

Extreme Networks (NASDAQ:EXTR - Get Free Report)'s stock had its "buy" rating reissued by research analysts at Rosenblatt Securities in a research report issued to clients and investors on Thursday, Benzinga reports. They currently have a $38.00 price objective on the technology company's stock. Rosenblatt Securities's target price would indicate a potential upside of 55.48% from the stock's current price.

Several other research analysts have also weighed in on the company. Needham & Company LLC reiterated a "buy" rating and issued a $35.00 price objective on shares of Extreme Networks in a research report on Wednesday. Weiss Ratings raised Extreme Networks from a "sell (d+)" rating to a "hold (c-)" rating in a research note on Friday, October 16th. B. Riley Financial lifted their target price on Extreme Networks from $28.00 to $34.00 and gave the company a "buy" rating in a research report on Thursday, August 6th. Oppenheimer reaffirmed an "outperform" rating on shares of Extreme Networks in a research note on Thursday, August 6th. Finally, Wall Street Zen raised Extreme Networks from a "buy" rating to a "strong-buy" rating in a research note on Saturday, August 8th. Seven equities research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company. According to data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and an average target price of $32.25.

Extreme Networks Stock Up 2.5%

NASDAQ EXTR opened at $24.44 on Thursday. The business has a fifty day moving average price of $22.46 and a 200 day moving average price of $21.91. The company has a debt-to-equity ratio of 1.63, a quick ratio of 0.81 and a current ratio of 0.93. The company has a market cap of $3.23 billion, a P/E ratio of 78.84, a P/E/G ratio of 1.45 and a beta of 1.76. Extreme Networks has a one year low of $13.48 and a one year high of $33.73.

Extreme Networks (NASDAQ:EXTR - Get Free Report) last released its earnings results on Wednesday, October 28th. The technology company reported $0.33 earnings per share for the quarter, topping analysts' consensus estimates of $0.28 by $0.05. The business had revenue of $341.09 million for the quarter, compared to analyst estimates of $336.75 million. Extreme Networks had a net margin of 3.28% and a return on equity of 88.88%. The business's revenue was up 10.0% on a year-over-year basis. During the same period last year, the company posted $0.22 EPS. Research analysts anticipate that Extreme Networks will post 0.75 EPS for the current fiscal year.

Insider Transactions at Extreme Networks

In other Extreme Networks news, CEO Edward Meyercord sold 50,000 shares of the firm's stock in a transaction on Thursday, October 1st. The stock was sold at an average price of $21.77, for a total value of $1,088,500.00. Following the sale, the chief executive officer directly owned 1,710,097 shares in the company, valued at $37,228,811.69. This trade represents a 2.84% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Kevin R. Rhodes sold 21,825 shares of the firm's stock in a transaction dated Friday, August 21st. The stock was sold at an average price of $22.30, for a total value of $486,697.50. Following the sale, the chief financial officer directly owned 196,803 shares in the company, valued at $4,388,706.90. This trade represents a 9.98% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 121,825 shares of company stock worth $3,064,698 in the last ninety days. 3.20% of the stock is owned by corporate insiders.

Institutional Trading of Extreme Networks

A number of large investors have recently made changes to their positions in the company. BlackRock Inc. acquired a new position in Extreme Networks during the second quarter valued at approximately $674,661,000. Paradigm Capital Management Inc. NY acquired a new stake in shares of Extreme Networks in the second quarter worth $137,291,000. Bank of America Corp DE acquired a new stake in shares of Extreme Networks in the second quarter worth $45,531,000. SEB Asset Management AB acquired a new stake in shares of Extreme Networks in the first quarter worth $12,192,000. Finally, Bank of New York Mellon Corp purchased a new position in shares of Extreme Networks in the 2nd quarter valued at $23,896,000. 91.05% of the stock is owned by institutional investors and hedge funds.

Key Stories Impacting Extreme Networks

Here are the key news stories impacting Extreme Networks this week:

• Positive Sentiment: Q1 results exceeded expectations. Extreme Networks reported adjusted EPS of $0.33 versus the $0.28 analyst consensus, while revenue rose 10% year over year to $341.1 million, ahead of the $336.75 million estimate. GAAP net income increased to $16.0 million from $5.6 million, and operating margin expanded to 6.8% from 3.6%. Extreme Networks Q1 earnings report
• Positive Sentiment: Growth outlook remains favorable. Management forecast fiscal Q2 revenue of $345.8 million to $350.8 million and GAAP EPS of $0.19 to $0.22. Fiscal 2027 revenue guidance was set at $1.402 billion to $1.412 billion, with GAAP EPS of $0.77 to $0.83. Extreme Networks fiscal 2027 results
• Positive Sentiment: Platform ONE momentum strengthened. Subscription bookings for Platform ONE accounted for more than 50% of total subscription bookings, up fivefold from the prior year. SaaS annual recurring revenue rose 22% to $264.7 million, supporting the company’s recurring-revenue strategy. Platform ONE adoption article
• Neutral Sentiment: Extreme repurchased $25 million of stock during the quarter, which may support per-share results, although the company’s relatively high valuation leaves shares sensitive to any slowdown in growth.
• Negative Sentiment: Regulatory risk remains a concern. Extreme agreed to pay approximately $976,000 to resolve a Justice Department probe involving sales of networking equipment to a Russian weapons manufacturer. The settlement adds compliance and reputational risk, even though the financial penalty is modest relative to revenue. DOJ settlement article
• Negative Sentiment: Quiver data showed continued insider selling, with executives reporting 27 sales and no purchases over the past six months, a potential negative signal for sentiment.

Extreme Networks Company Profile

Extreme Networks, Inc develops networking solutions that help organizations connect, manage and secure users, devices and applications across campus, data center and distributed environments. Its portfolio includes wired and wireless network infrastructure, Ethernet switches, access points, software-defined wide-area networking (SD-WAN), network access control and cloud-based network management.

The company's ExtremeCloud platform supports centralized monitoring, configuration, analytics and automation for network operations.

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