Needham maintains EXTR stock with $20 target after event
Investing.com
Published May 27, 2025 07:17AM ET
On Tuesday, Needham reiterated its Buy rating and $20.00 price target for Extreme Networks (NASDAQ:EXTR), representing nearly 30% upside from the current price of $15.39. The firm's endorsement follows its attendance at the Extreme Connect event in Paris, which took place from May 19-21. According to InvestingPro data, analysts' targets range from $15 to $22.50, with three analysts recently revising their earnings estimates upward. During the event, Extreme Networks unveiled its Platform One software, designed to integrate various network management aspects into a single AI-native platform. This strategic move comes as the company maintains a solid gross profit margin of 58% and operates with moderate debt levels.
The new software aims to offer a "unified source of truth," consolidating network, security, policy, asset, and subscription management. According to Needham, the response from customers and channel partners to Platform One was notably positive, with its features supporting critical use cases. Currently in beta, Platform One is accessible to E-Rate channels and is being introduced to the company's growing Managed Service Provider (MSP) customer base. General Availability is scheduled for the third calendar quarter.
Needham's confidence in Platform One's potential to boost Extreme Networks' software sales in Fiscal Year 2026 is growing. The firm anticipates that the software's success will be reflected in the company's Annual Recurring Revenue (ARR) metric. The positive outlook is supported by expectations of improved quarterly results by the end of Year 2025. InvestingPro analysis reveals that net income is expected to grow this year, with EPS forecasts reaching $0.82 for FY2025. Get access to 10+ additional exclusive ProTips and comprehensive financial analysis through InvestingPro's detailed research reports.
Extreme Networks' strategic moves, including the development and beta release of Platform One, are part of the company's efforts to enhance its software sales and overall financial performance. While the company's overall financial health score is rated as "FAIR" by InvestingPro , Needham's maintained Buy rating and price target suggest a belief in the company's capacity to achieve significant growth and offer investors a substantial return on investment. The stock has already demonstrated strong momentum with a 38% return over the past year.
In other recent news, Extreme Networks Inc. reported its third-quarter results for fiscal year 2025, surpassing both earnings and revenue forecasts. The company posted an earnings per share (EPS) of $0.21, exceeding the forecast of $0.18, and reported revenue of $285 million against an expected $279.16 million. Revenue grew 35% year-over-year, driven by strong product and SaaS sales. Extreme Networks also provided guidance for the fourth quarter, projecting revenue between $295 million and $305 million. The company launched the Extreme Platform One, enhancing its AI networking capabilities, which has been well-received by managed service providers. In terms of competitive positioning, Extreme Networks is seeing success against major players like Cisco (NASDAQ:CSCO) and HP (NYSE:HPQ), largely due to its differentiated campus fabric solution. Additionally, the company is expanding its footprint in federal markets, presenting significant growth opportunities.
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Written By: Investing.com
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