What happened

Shares of Extreme Networks (NASDAQ:EXTR) dropped 36.4% lower in the first half of 2018, according to data from S&P Global Market Intelligence. Following a string of rock-solid earnings reports in 2017, the enterprise networking specialist failed to impress investors in February's second-quarter report and May's third-quarter sequel.

So what

Extreme rebuilt itself last year by closing three strategic acquisitions. The new and improved company builds on Extreme's longtime expertise in Ethernet routers and switches, adding in software-based network management, enterprise-grade Wi-Fi tools, and storage networking products.

Management is still getting a handle on how to make the most out of this improved business model, and their financial forecasts are not always on target. The second quarter came in a bit light on the top line as Extreme turned away low-margin deals to focus on more profitable sales. An expected payoff in the form of higher third-quarter earnings failed to materialize, sending share prices more than 25% lower the next day alone.

Engineer holding the ends of a cut-off network cable with many strands in front of a data center equipment rack.

Clear! Image source: Getty Images.

Now what

Even after this 36% year-to-date plunge, Extreme's investors have enjoyed a 132% gain over the last two years. That span goes back to just before the first announcement of the acquisitions that came to roost in 2017.

So don't cry for Extreme Networks at this point -- the company is putting up a serious challenge to larger rivals Cisco Systems (NASDAQ:CSCO) and Juniper Networks (NYSE:JNPR), armed with the most complete data center networking portfolio you'll find outside of those two sector giants.

At this point, Extreme Networks shares are trading at the bargain-basement valuation of 8.3 times forward earnings estimates or 1.1 times trailing sales. I wouldn't be surprised to see the stock making a full recovery from this brutal haircut, which makes for a tempting buy-in opportunity right now.