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Extreme Networks Likely To Beat Q2 Driven By Backlogs As Supply Constraints Ease Out, Analyst Says

Extreme Networks Likely To Beat Q2 Driven By Backlogs As Supply Constraints Ease Out, Analyst Says

分析师表示，随着供应限制的缓解，在积压的推动下，Extreme Networks可能会击败第二季度
Benzinga Real-time News ·  2023/01/23 14:37
  • Needham analyst Alex Henderson reiterated Buy on Extreme Networks, Inc (NASDAQ:EXTR) with a $23 price target.
  • Unlike components and semis, systems backlogs are virtually never double-ordered and rarely canceled.
  • Systems backlogs range from 30% at Cisco Systems, Inc (NASDAQ:CSCO) to 60%+ at Juniper Networks, Inc (NYSE:JNPR), Infinera Corp (NASDAQ:INFN), Extreme, and Ceragon Networks Ltd (NASDAQ:CRNT) to 100%+ at Ciena Corp (NYSE:CIEN) and provide more than just high visibility against macro erosion.
  • Despite macro fears and Street expectations for declining estimates for the S&P for CY23, the analyst expects Extreme to deliver beat and raise results.
  • Extreme is still supply constrained, with a backlog equating to over 60% of estimated CY23 product sales.
  • In an environment where investors braced for estimate cuts, these backlogs, combined with improving availability and declining parts and logistics costs, provide ample upside to revenues and EPS and likely drive improving valuations.
  • In the case of Extreme, the analyst thinks the current conditions are already evidencing the proper dynamics to produce this outcome. Further, Extreme has done an excellent job positioning for AI cloud native. It has vital new products set to ramp up in its Universal product line, which should further improve its competitive position and offer even better gross margins.
  • As the economy weakens, Henderson looks for supply to improve and part costs to decline.
  • In turn, the analyst thinks this will allow Extreme to ship more products out of its large and firm backlog than expected, resulting in an upside to revenues and gross margins.
  • The Street expects 2Q23 revenue to be up 9% and EPS to be up 14% at the mid-point of the guide against the most challenging compare of the year.
  • Henderson thinks growth will exceed 10%, EXTR will beat EPS, and it will raise its guide for 3Q23 (CY1Q) and FY23.
  • In addition, the analyst expects improving supply to allow Extreme to bring down inventory and enhance its cash flow.
  • The analyst forecasts 12% revenue growth over the next three quarters. Henderson thinks improving supply availability at a rate above Extreme's expectations likely drive revenue growth of 15%+ over this period.
  • The analyst also thinks there is an upside to gross margins, and the upside to revenues should drive OpEx leverage.
  • Price Action: EXTR shares traded higher by 4.34% at $19.70 on the last check Monday.
  • Photo Via Company
  • 尼德姆 分析师亚历克斯·亨德森重申买入 极限网络有限公司 （纳斯达克股票代码：EXTR），目标价为23美元。
  • 与组件和半导体不同，系统积压的工作几乎从不重复订购，也很少被取消。
  • 系统积压量从 30% 不等 思科系统公司 （纳斯达克股票代码：CSCO）涨至60％以上 瞻博网络公司 （纽约证券交易所代码：JNPR）， 英飞凌公司 （纳斯达克股票代码：INFN）、Extreme 和 Ceragon 网络有限公司 （纳斯达克股票代码：CRNT）涨至100％以上 Ciena Corp （纽约证券交易所代码：CIEN），而且提供的不仅仅是抵御宏观侵蚀的高能见度。
  • 尽管存在宏观担忧，而且华尔街预计标准普尔对CY23的预期会下降，但分析师预计Extreme将取得超出预期的业绩。
  • Extreme仍然受到供应限制，积压的商品相当于CY23预计产品销售额的60％以上。
  • 在投资者为削减预估值做好准备的环境中，这些积压，加上可用性的改善以及零件和物流成本的下降，为收入和每股收益提供了充足的上行空间，并可能推动估值的提高。
  • 就Extreme而言，分析师认为，当前的情况已经证明了产生这一结果的正确动力。此外，Extreme 在人工智能云原生方面做得非常出色。它的环球产品线中有重要的新产品有待扩展，这将进一步提高其竞争地位并提供更好的毛利率。
  • 随着经济疲软，亨德森希望改善供应，降低零件成本。
  • 反过来，分析师认为，这将使Extreme能够从其庞大的公司积压产品中出货比预期更多的产品，从而提高收入和毛利率。
  • 华尔街预计，与今年最具挑战性的比较相比，该指南中点的第二季度收入将增长9％，每股收益将增长14％。
  • 亨德森认为，增长将超过10％，EXTR将超过每股收益，并将提高其对23年第三季度（CY1Q）和23财年的预期。
  • 此外，分析师预计，供应的改善将使Extreme能够减少库存并增加其现金流。
  • 分析师预测，未来三个季度的收入将增长12％。亨德森认为，以高于Extreme预期的速度改善供应供应可能会推动同期收入增长15％以上。
  • 分析师还认为，毛利率有上行空间，收入的上行应该会推动运营支出杠杆率。
  • 价格走势： 周一的最后一张支票中，EXTR股价上涨了4.34％，至19.70美元。
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