Extreme Networks: Seeking a Buyer?

Is Extreme Networks (EXTR) seeking a buyer?

In a brief research note this morning, JMP Research analyst Samuel Wilson wrote that sources in Silicon Valley say the company is “seen to be seeking an acquirer, potentially leading Extreme to be worth considerably more than its current enterprise value.”

Extreme reportedly rotten FYQ3 results (see transcript) but as I noted in my print column in Barron’s over the weekend, the stock looks extremely cheap. (I wrote a longer piece about the company in the March 17 issue of the magazine.)

Here’s the full item from the current magazine:

EXTREME DISAPPOINTMENT: That’s the phrase for the latest results from Extreme Networks, which missed both top- and bottom-line expectations for its March quarter. In my March 17 column, I noted that the networking-equipment company is ridiculously cheap. Now it’s a tad cheaper, after Extreme said that some customers had delayed orders toward the end of March. But the thesis on the stock is the same. The company has a $345 million market value and more than $230 million in cash and securities. In short, for $115 million, you get a profitable outfit that produced $82 million in revenue in the latest quarter. Where’s an LBO fund when you need one?

Comments

[AmesTiedeman]

EXTR is one of a handful that look this good. Nice find, however!