2023: Is Extreme Networks’ Growing Debt Too Much to Handle?
March 21, 2023
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As Extreme Networks ($NASDAQ:EXTR) continues to grow, so too does its debt. In 2023, the question that needs to be asked is whether this increased debt load is becoming too hard for the company to manage. While the company does have some cash on hand, it is not enough to make up for the increased debt. This leaves them vulnerable to potential downturns in the market and increases their risk of defaulting on debt repayments. Furthermore, Extreme Networks’ potential revenue is not high enough to offset their current debt levels.
If the company’s revenue does not increase significantly, or if they fail to manage their debt better, they could be looking at a serious financial situation in the coming years. Ultimately, Extreme Networks must take steps to reduce their current debts and ensure that they are able to generate enough revenue to cover them. Without doing this, they may find themselves in an unsustainable financial position by 2023.
Share Price
As of right now, media exposure to Extreme Networks is mostly positive. This was demonstrated on Thursday, when their stock opened at $16.8 and closed at $17.7, up by 4.1% from the prior closing price of $17.0. The company has been investing heavily, seeking to acquire additional technology and broaden its product line. This investment has led to increased debt, which could become an issue in the future. As the debt increases, there is less money available for other expenses, such as research and development or marketing.
This could lead to a decrease in revenue and profitability for the company as a whole. Ultimately, it is yet to be seen if Extreme Networks will be able to manage their growing debt responsibly in the coming years. The media exposure has been positive for now, but the future of the company could be uncertain if their debt becomes too high. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Extreme Networks. More…
| Total Revenues | Net Income | Net Margin |
| 1.18k | 48.75 | 4.6% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Extreme Networks. More…
| Operations | Investing | Financing |
| 186.03 | -15.05 | -140.88 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Extreme Networks. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 1.06k | 977.61 | 0.65 |
Key Ratios Snapshot
Some of the financial key ratios for Extreme Networks are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 4.8% | 17.8% | 6.0% |
| FCF Margin | ROE | ROA |
| 14.5% | 45.3% | 4.2% |
Analysis
At GoodWhale, we have recently conducted an analysis of Extreme Networks’ financials. After our evaluation, we have come to the conclusion that Extreme Networks is a high risk investment in terms of both financial and business aspects. This conclusion is drawn from our Risk Rating algorithm, which evaluates different factors related to the company’s financials. We have also detected one risk warning in the income sheet. If you are interested in getting deeper insight into this specific warning, we would suggest that you register with us. We offer a free trial to all our new users, and this could be an opportunity for you to get an even better understanding of the risk that Extreme Networks poses. So don’t hesitate to contact us today and get started with your free trial! More…
Peers
The company’s products are designed to meet the most demanding networking challenges. Extreme Networks Inc has a strong focus on innovation and customer satisfaction. The company’s products are backed by a team of highly skilled and experienced professionals. Extreme Networks Inc is a publicly traded company on the Nasdaq Stock Market under the ticker symbol EXTR.
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Summary
Extreme Networks is an American technology company specializing in network management and cloud-based solutions. In recent years, the company has seen a growing debt load, raising questions about its financial health.
However, the company’s stock price has trended upwards due to a surge in media coverage, which has been largely positive. Analysts suggest that despite the debt, Extreme Networks’ strengths in the fields of IT and networking provide good prospects for the future, making it a good investment for those who are willing to take a risk. Investors should evaluate the company’s financials and growth trajectory before making a decision.
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