Rosenblatt Upgrades Extreme Networks (EXTR) to Buy
Rosenblatt analyst Mike Genovese upgraded Extreme Networks (NASDAQ: EXTR) from Neutral to Buy with a price target of $17.00 (from $15.00).
The analyst comments "We downgraded EXTR to Neutral a few months ago on lack of near-term catalysts. We are now upgrading to Buy because 3Q24 (March) was the bottom for revenues and margins, Cisco's (CSCO, Neutral) execution in the Enterprise Networking space is not improving, and Juniper's (JNPR, Neutral) and HPE's are deteriorating. There are product drivers like WiFi 6E and 7, Security (Cloud NAC and Zero-Trust Network Access), and AI (AI Expert), and Extreme has a compelling business model with growing SaaS and recurring revenues. Revenues are expected to grow sequentially from here, including in 1Q25, as the company fully moves past its channel inventory issue. The macro environment is soft, especially in Europe, but should slowly recover. We now have more confidence the company can deliver 10+% revenue growth in FY26 as quarterly sales normalize to a $300+mn run rate. In addition, the stock has come down since the downgrade. We are increasing our price target to $17 from $15, based on 15x our FY26 EPS forecast. We find the EXTR compelling enough to recommend again."
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Shares of Extreme Networks closed at $11.44 yesterday.