Extreme Networks (NASDAQ:EXTR) Shares Gap Up After Strong Earnings

Key Points

• Extreme Networks shares initially gapped higher after the company reported quarterly EPS of $0.33, beating estimates of $0.28. Revenue reached $341.09 million, above expectations, and increased 10% year over year.
• Analysts maintain a generally positive outlook, with seven Buy ratings and two Holds, producing a “Moderate Buy” consensus and an average price target of $32.25.
• Company insiders sold 121,825 shares worth approximately $3.1 million over the past 90 days, while institutional investors own 91.05% of the stock.

Extreme Networks, Inc. (NASDAQ:EXTR - Get Free Report)'s stock price gapped up prior to trading on Wednesday following a stronger than expected earnings report. The stock had previously closed at $23.85, but opened at $25.74. Extreme Networks shares last traded at $23.56, with a volume of 248,518 shares trading hands.

The technology company reported $0.33 EPS for the quarter, beating analysts' consensus estimates of $0.28 by $0.05. The firm had revenue of $341.09 million during the quarter, compared to the consensus estimate of $336.75 million. Extreme Networks's quarterly revenue was up 10.0% on a year-over-year basis. During the same quarter in the prior year, the company earned $0.22 EPS.

Wall Street Analysts Forecast Growth

EXTR has been the topic of several recent research reports. Needham & Company LLC dropped their price target on Extreme Networks from $38.00 to $35.00 and set a "buy" rating on the stock in a research note on Wednesday, August 5th. Rosenblatt Securities reissued a "buy" rating and issued a $38.00 price objective on shares of Extreme Networks in a research report on Thursday, October 22nd. Oppenheimer reissued an "outperform" rating on shares of Extreme Networks in a report on Thursday, August 6th. Craig Hallum restated a "buy" rating and issued a $31.00 price target on shares of Extreme Networks in a research note on Thursday, August 6th. Finally, Weiss Ratings raised Extreme Networks from a "sell (d+)" rating to a "hold (c-)" rating in a report on Friday, October 16th. Seven analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company's stock. Based on data from MarketBeat.com, the company has an average rating of "Moderate Buy" and a consensus target price of $32.25.

Insider Buying and Selling

In related news, CFO Kevin R. Rhodes sold 21,825 shares of the business's stock in a transaction on Friday, August 21st. The stock was sold at an average price of $22.30, for a total value of $486,697.50. Following the completion of the sale, the chief financial officer directly owned 196,803 shares in the company, valued at $4,388,706.90. The trade was a 9.98% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Edward Meyercord sold 50,000 shares of the company's stock in a transaction on Thursday, October 1st. The shares were sold at an average price of $21.77, for a total value of $1,088,500.00. Following the completion of the transaction, the chief executive officer directly owned 1,710,097 shares in the company, valued at approximately $37,228,811.69. This represents a 2.84% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 121,825 shares of company stock valued at $3,064,698. Corporate insiders own 3.20% of the company's stock.

Institutional Inflows and Outflows

Several large investors have recently added to or reduced their stakes in the company. Verdence Capital Advisors LLC raised its position in shares of Extreme Networks by 2.3% in the third quarter. Verdence Capital Advisors LLC now owns 25,166 shares of the technology company's stock valued at $540,000 after buying an additional 561 shares in the last quarter. Simplicity Wealth LLC grew its position in Extreme Networks by 113.6% during the third quarter. Simplicity Wealth LLC now owns 48,045 shares of the technology company's stock worth $1,031,000 after buying an additional 25,550 shares in the last quarter. Sterling Capital Management LLC grew its position in Extreme Networks by 840.1% during the third quarter. Sterling Capital Management LLC now owns 4,287 shares of the technology company's stock worth $92,000 after buying an additional 3,831 shares in the last quarter. Cantor Fitzgerald Investment Advisors L.P. bought a new position in Extreme Networks during the 3rd quarter worth $1,373,000. Finally, Nisa Investment Advisors LLC increased its stake in Extreme Networks by 103.5% during the 3rd quarter. Nisa Investment Advisors LLC now owns 8,617 shares of the technology company's stock worth $185,000 after acquiring an additional 4,383 shares during the period. Institutional investors own 91.05% of the company's stock.

Extreme Networks Trading Down 2.3%

The stock has a market cap of $3.08 billion, a P/E ratio of 75.24 and a beta of 1.76. The stock has a 50 day simple moving average of $22.45 and a 200 day simple moving average of $21.87.

About Extreme Networks

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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