Take off with Extreme Networks Inc. (EXTR): Get ready for trading

Extreme Networks Inc. (NASDAQ: EXTR) stock jumped 0.96% on Wednesday to $19.92 against a previous-day closing price of $19.73. With 1.11 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.19 million shares. During the session, the Communication Equipment company that operates in wider Technology sector, reached to the highest price of $20.25 whereas the lowest price it dropped to was $19.65. The 52-week range on EXTR shows that it touched its highest point at $19.90 and its lowest point at $8.49 during that stretch. It currently has a 1-year price target of $21.00. Beta for the stock currently stands at 2.09.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of EXTR was up-trending over the past week, with a rise of 8.08%, but this was up by 25.60% over a month. Three-month performance surged to 38.72% while six-month performance rose 113.96%. The stock gained 48.77% in the past year, while it has gained 26.88% so far this year. A look at the trailing 12-month EPS for EXTR yields 0.33 with Next year EPS estimates of 1.38. For the next quarter, that number is 0.24. This implies an EPS growth rate of 29.90% for this year and 37.71% for next year. EPS is expected to grow by 20.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 86.50%.

Float and Shares Shorts:

At present, 130.29 million EXTR shares are outstanding with a float of 128.33 million shares on hand for trading. On Oct 13, 2022, short shares totaled 7.44 million, which was 5.67% higher than short shares on Sep 14, 2022. In addition to Mr. Edward B. Meyercord III as the firm’s Pres, CEO & Exec. Director, Mr. Rémi Thomas serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 86.07% of EXTR’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 51.96% of EXTR, in contrast to 35.52% held by mutual funds. Shares owned by individuals account for 19.01%. As the largest shareholder in EXTR with 11.44% of the stake, BlackRock Fund Advisors holds 15,021,068 shares worth 15,021,068. A second-largest stockholder of EXTR, The Vanguard Group, Inc., holds 12,145,773 shares, controlling over 9.25% of the firm’s shares. Capital Research & Management Co is the third largest shareholder in EXTR, holding 9,475,310 shares or 7.21% stake. With a 6.58% stake in EXTR, the American Funds Small Cap World Fu is the largest stakeholder. A total of 8,646,932 shares are owned by the mutual fund manager. The iShares Core S&P Small Cap ETF, which owns about 4.45% of EXTR stock, is the second-largest Mutual Fund holder. It holds 5,838,562 shares valued at 104.74 million. Vanguard Total Stock Market Index holds 2.97% of the stake in EXTR, owning 3,896,454 shares worth 69.9 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for EXTR since 7 analysts follow the stock currently. There are 6 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 1 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With EXTR analysts setting a high price target of $23.00 and a low target of $18.00, the average target price over the next 12 months is $21.00. Based on these targets, EXTR could surge 15.46% to reach the target high and fall by -9.64% to reach the target low. Reaching the average price target will result in a growth of 5.42% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. EXTR will report FY 2023 earnings on 08/09/2023. Analysts have provided yearly estimates in a range of $1.04 being high and $0.97 being low. For EXTR, this leads to a yearly average estimate of $1.00. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Extreme Networks Inc. surprised analysts by $0.03 when it reported $0.20 EPS against a consensus estimate of $0.17. The surprise factor in the prior quarter was $0.01. Based on analyst estimates, the high estimate for the next quarter is $0.25 and the low estimate is $0.22. The average estimate for the next quarter is thus $0.24.

Summary of Insider Activity:

Insiders traded EXTR stock several times over the past three months with 3 Buys and 10 Sells. In these transactions, 68,090 shares were bought while 225,673 shares were sold. The number of buy transactions has increased to 35 while that of sell transactions has risen to 53 over the past year. The total number of shares bought during that period was 1,212,303 while 1,103,129 shares were sold.

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