Extreme Stock Story

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EXTR
 Stock
  

USD 13.90  0.27  1.98%   

By Ellen Johnson
Macroaxis Story
Extreme Networks Market Capitalization is relatively stable at the moment as compared to the past year. Extreme Networks reported last year Market Capitalization of 1.62 Billion. As of 07/27/2022, Working Capital is likely to grow to about 37.6 M, while Invested Capital is likely to drop slightly above 309.6 M. The fundamental reasoning behind this short post is to break down our forecasting of Extreme for retail investors. We will try to forecast Extreme Networks outlook for August.
Published over a week ago
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Are Extreme (NASDAQ:EXTR) retail investors starting to hold back?

Extreme Networks is UNDERVALUED at 13.20 per share with modest projections ahead. Over 88.0% of Extreme Networks shares are held by institutions such as insurance companies. Institutional ownership of Extreme Networks refers to the amount of Extreme Networks equity owned by mutual funds, pension funds, insurance companies, investment firms, foundations, or other large entities that manage money on behalf of others. Check out our latest analysis of Extreme, including its current ownership diagnostics.
There are currently many different techniques concerning forecasting the market as a whole as well as predicting future values of individual securities such as Extreme Networks. Regardless of method or technology, to accurately forecast the stock or bond market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.

Predictive Modules for Extreme Networks

Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of Extreme Networks' price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of Extreme Networks in the context of predictive analytics.
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Please note, it is not enough to conduct a financial or market analysis of a single entity such as Extreme Networks. Your research has to be compared to or analyzed against Extreme Networks' peers to derive any actionable benefits. When done correctly, Extreme Networks' competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Extreme Networks.

How important is Extreme Networks's Liquidity

Extreme Networks financial leverage refers to using borrowed capital as a funding source to finance Extreme Networks ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Extreme Networks financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Extreme Networks's total debt and its cash.

How does Extreme utilize 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 166.22 Million

Detailed Perspective On Extreme Networks

Extreme Networks exhibits very low volatility with skewness of -0.66 and kurtosis of 4.91. However, we advise investors to further study Extreme Networks technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Extreme Networks' stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Extreme Networks' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Extreme Networks Implied Volatility

Extreme Networks' implied volatility exposes the market's sentiment of Extreme Networks stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Extreme Networks' implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Extreme Networks stock will not fluctuate a lot when Extreme Networks' options are near their expiration.

Margin Breakdown

Operating Margin4.23
EBITDA Margin0.0855
Gross Margin0.66
Profit Margin0.001942

Will Extreme Networks growth be reliable after the spike?

The potential upside is down to 5.44 as of today. Extreme Networks exhibits very low volatility with skewness of -0.66 and kurtosis of 4.91. However, we advise investors to further study Extreme Networks technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Extreme Networks' stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Extreme Networks' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Extreme Networks Implied Volatility

Extreme Networks' implied volatility exposes the market's sentiment of Extreme Networks stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Extreme Networks' implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Extreme Networks stock will not fluctuate a lot when Extreme Networks' options are near their expiration.

Our Bottom Line On Extreme Networks

While few other entities 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 bottom line, as of the 27th of July 2022, we believe that at this point, Extreme Networks is undervalued with below average probability of distress within the next 2 years. Our up-to-date buy-hold-sell recommendation on the enterprise is Buy.

Editorial Staff

Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management. View Profile
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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