The Ethernet networking specialist has seen its shares swoon by about 4% since reporting earnings this week. It was a respectable effort with 26% year-over-year sales growth and a $0.05 non-GAAP profit per share in contrast to the year-ago period's similar-sized net loss. Sales were strong across most geographies, but North American revenue was hampered by Extreme reorganizing its domestic sales force into a three-region structure.
From there, the news only gets worse. The company is selling more hardware and less of its services than it did last year, which is bad for margins. Hard-nosed competition from Cisco Systems
The company lacks the scale to truly compete with the likes of Cisco or Juniper Networks
I don't make many "underperform" calls in our CAPS system, but I'm going there this time. I think Extreme Networks has seen its halcyon days, and I'm not even convinced that a deep-pocketed buyer of some sort would find the company's assets terribly attractive. This five-star rating out of five makes no sense to me. You can follow my all-star lead or cast the opposite vote in just a couple of clicks.
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