Extreme Networks, Inc (NASDAQ:EXTR) Beats Estimates, Stays Afloat

[[tagnumber 0]][[tagnumber 1]]After gaining 11.42 per cent after beating analyst expectations last Friday, the shares of Extreme Networks, Inc (NASDAQ:EXTR) closed yesterday at the same price level of $2.83 per share on a slightly lower volume of 1.7 million. Yet, EXTR is not treading any new ground since it has already been there and even beyond with a 52–week high of $5.49.[[tagnumber 2]] [[tagnumber 0]]A quick look at the earnings announcement from Aug. 6 reveals a few points of interest. For a start, let us examine the relation between revenue and earnings per share both on a quarterly and annual basis. On the one hand, the company‘s Q4 revenue of $149.9 million marks a minor 4.5 per cent decrease from the corresponding quarterly result in 2014. However, earnings per share improved by a cent over the same period. On the other hand, the FY 2015 revenue clocked in at $553 million, up 6 per cent from the year prior. Nevertheless, the EPS loss in 2015 (on a GAAP basis) amounted to $0.72 as compared to an EPS loss of $0.60 in the 2014 fiscal year. Of course, these figures would look fairly different on a pre–GAAP basis.[[tagnumber 2]] [[tagnumber 0]][[tagnumber 6]]That EXTR shares are now 50 per cent away from their most recent 52–week high leaves a lot of room for improvement on the charts. At the same time, a depreciation of such magnitude is by far not among the worst we have seen. As it seems, analysts at Wall Street do not expect things to go downhill as the majority of them are giving the stock a “hold“ rating. Fundamentally, EXTR has managed to remain in the black while gradually decreasing its outstanding long–term debt. The latter shrank by 40 per cent over the last four quarters on record.[[tagnumber 2]] [[tagnumber 0]]When it comes to insider trading, we see negative net activity for the last three months as 131 thousand shares have been sold in 5 transactions. By contrast, the situation is quite different on a 12–month basis with net activity of 878 thousand shares, which could be indicative of the insiders’ sentiment towards the stock. Of course, there are shorters on the other side of the spectrum as evident from the most recent days–to–cover ratio of 3.66, which should be taken into account by every investor planning to sell EXTR short right now.[[tagnumber 2]]