Extreme Networks (NASDAQ:EXTR) Shares Gap Up - Should You Buy?

Key Points

• Extreme Networks shares jumped 15.6%, opening at $24.04 after closing at $21.05 and later trading near $24.74.
• The company beat quarterly expectations, reporting EPS of $0.33 versus $0.28 expected and revenue of $341.1 million versus $336.8 million; revenue grew 10% year over year.
• Analysts hold a consensus “Moderate Buy” rating, with an average price target of $33.86.

Extreme Networks, Inc. (NASDAQ:EXTR - Get Free Report)'s share price gapped up before the market opened on Friday. The stock had previously closed at $21.05, but opened at $24.04. Extreme Networks shares last traded at $24.7370, with a volume of 1,300,638 shares traded.

Wall Street Analyst Weigh In

EXTR has been the subject of a number of recent research reports. Rosenblatt Securities reiterated a "buy" rating and issued a $38.00 target price on shares of Extreme Networks in a report on Thursday, October 29th. Oppenheimer reissued an "outperform" rating on shares of Extreme Networks in a research note on Thursday, August 6th. UBS Group set a $32.00 price target on Extreme Networks in a report on Thursday, October 29th. Wall Street Zen upgraded Extreme Networks from a "buy" rating to a "strong-buy" rating in a report on Saturday, August 8th. Finally, Needham & Company LLC reaffirmed a "buy" rating and issued a $35.00 price target on shares of Extreme Networks in a research report on Wednesday, October 28th. One investment analyst has rated the stock with a Strong Buy rating, seven have assigned a Buy rating and two have issued a Hold rating to the stock. According to MarketBeat, Extreme Networks has a consensus rating of "Moderate Buy" and an average price target of $33.86.

Extreme Networks Stock Up 15.6%

The company has a debt-to-equity ratio of 2.27, a current ratio of 1.02 and a quick ratio of 0.87. The company has a market cap of $3.19 billion, a PE ratio of 62.59, a P/E/G ratio of 1.47 and a beta of 1.81. The business's 50 day moving average is $22.45 and its 200-day moving average is $22.11.

Extreme Networks (NASDAQ:EXTR - Get Free Report) last announced its quarterly earnings data on Wednesday, October 28th. The technology company reported $0.33 EPS for the quarter, beating analysts' consensus estimates of $0.28 by $0.05. The company had revenue of $341.09 million for the quarter, compared to the consensus estimate of $336.75 million. Extreme Networks had a net margin of 3.99% and a return on equity of 102.41%. The company's quarterly revenue was up 10.0% compared to the same quarter last year. During the same period in the prior year, the firm posted $0.22 EPS. As a group, analysts predict that Extreme Networks, Inc. will post 0.86 EPS for the current year.

Insider Buying and Selling at Extreme Networks

In related news, CFO Kevin Rhodes sold 21,825 shares of the 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 transaction, the chief financial officer owned 196,803 shares of the company's stock, valued at $4,388,706.90. This represents a 9.98% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Edward Meyercord sold 50,000 shares of the firm'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 sale, the chief executive officer 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. Corporate insiders own 3.20% of the company's stock.

Hedge Funds Weigh In On Extreme Networks

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the business. Integrated Wealth Concepts LLC purchased a new stake in shares of Extreme Networks during the 2nd quarter worth approximately $25,000. Public Employees Retirement System of Ohio acquired a new position in shares of Extreme Networks in the 2nd quarter valued at $28,000. CoreCap Advisors LLC boosted its holdings in shares of Extreme Networks by 72.3% in the 3rd quarter. CoreCap Advisors LLC now owns 1,201 shares of the technology company's stock valued at $26,000 after buying an additional 504 shares in the last quarter. Nykredit A S purchased a new position in shares of Extreme Networks in the 2nd quarter valued at $48,000. Finally, Rockefeller Capital Management L.P. grew its position in shares of Extreme Networks by 313.7% in the 4th quarter. Rockefeller Capital Management L.P. now owns 1,957 shares of the technology company's stock valued at $33,000 after buying an additional 1,484 shares during the last quarter. 91.05% of the stock is owned by institutional investors and hedge funds.

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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