Extreme Story

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EXTR -- USA Stock  

USD 3.88  0.21  5.13%

While some of us are excited about technology space, it makes sense to sum up Extreme Networks in greater detail to make a better assessment of its actual value. We are going to cover the possibilities of making Extreme Networks into your portfolio. Is Extreme Networks current valuation justified for 2020? Here i will cover my perspective on valuation to give Extreme retail investors a better outlook on taking a position in the stock.
Published over a month ago
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Is Extreme Networks (NASDAQ:EXTR) ready for a correction?
The company currently holds 488.58 M in liabilities. Extreme Networks is UNDERVALUED at 5.16 per share with modest projections ahead. About 86.0% of the company shares are held by institutions such as insurance companies. Extreme Networks recorded a loss per share of 1.03. The entity last dividend was issued on the 29th of October 2010. The firm had 2:1 split on the 25th of August 2000.
We determine the current worth of Extreme Networks using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Extreme Networks based exclusively on its fundamental and basic technical indicators. By analyzing Extreme Networks's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Extreme Networks's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Extreme Networks. We calculate exposure to Extreme Networks's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Extreme Networks's related companies.

Extreme Networks Investment Alerts

Extreme investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Extreme Networks performance across your portfolios.Please check all investment alerts for Extreme

Extreme Networks Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Extreme value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Extreme Networks competition to find correlations between indicators driving the intrinsic value of Extreme.

How Extreme utilizes its cash?

To perform a cash flow analysis of Extreme Networks, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Extreme Networks is receiving and how much cash it distributes out in a given period. The Extreme Networks cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Extreme Networks Net Cash Flow from Operations is relatively stable at the moment as compared to the past year. Extreme Networks reported last year Net Cash Flow from Operations of 35.88 Million

What is driving Extreme Networks Investor Appetite?

Extreme Networks reported the previous year's revenue of 984.86 M. Net Loss for the year was (122.68 M) with profit before overhead, payroll, taxes, and interest of 551.24 M.
 2017 2018 2019 2020 (projected)
Interest Expense13.92 M12.6 M14.49 M15.63 M
Gross Profit534.52 M551.24 M633.92 M503.16 M

Margins Breakdown

Extreme profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Extreme Networks itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Extreme Networks profit margins.
Operating Margin(1.84)
EBITDA Margin0.0308
Gross Margin0.49
Profit Margin(0.0253)

Extreme Networks Revenue Per Employee is decreasing over the last 8 years. Also, Extreme Networks Earnings Before Interest Taxes and Depreciation Amortization EBITDA is increasing over the last 8 years. The previous year's value of Extreme Networks Earnings Before Interest Taxes and Depreciation Amortization EBITDA was 49,130,300.

Can Extreme Networks build up on the latest spike?

The semi deviation is down to 3.73 as of today. Extreme Networks shows above-average downside volatility for the selected time horizon. We advise investors to inspect Extreme Networks further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Extreme Networks future alpha.

The Bottom Line

While many other companies within the communication equipment industry are still a little expensive, even after the recent corrections, Extreme Networks may offer a potential longer-term growth to retail investors. The inconsistency in the assessment between current Extreme valuation and our trade advice on Extreme Networks is due to the recent market swings and your selection of investing horizon. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Extreme Networks.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Extreme Networks. Please refer to our Terms of Use for any information regarding our disclosure principles.

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