share_log

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

分析師稱，由於供應限制緩解，極端網絡可能會擊敗積壓的第二季度
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
  • 李約瑟 分析師亞歷克斯·亨德森重申買入 極端網絡公司 （納斯達克：EXTR）的目標價格為 23 美元。
  • 與元件和半切換不同的是，系統待處理項目幾乎絕不是雙重排序且很少取消。
  • 系統積壓範圍從 30% 在 思科系統公司 (納斯達克:CSCO) 到 60% + 在 瞻博網絡公司 (紐約:JNPR), 英菲拉 (納斯達克:INFN), 極端, 和 思騰網絡有限公司 （納斯達克：CRNT）到 100％ + 在 捷納公司 紐約證券交易所代碼：CIEN）並提供不僅僅是對抗宏觀侵蝕的高可見性。
  • 儘管宏觀恐懼和街道對 CY23 標普估值下降的預期，但分析師預計 Extreme 將帶來擊敗並提高結果。
  • 極端仍然受到供應限制，積壓相當於估計 CY23 產品銷售額的 60％ 以上。
  • 在投資者為削減估算做好準備的環境中，這些積壓加上提高可用性以及零件和物流成本下降的結合，為收入和每股收益提供了充足的優勢，並可能推動改善估值。
  • 在極端的情況下，分析師認為目前的條件已經證明了產生這種結果的適當動態。此外，極端已經為 AI 雲原生做了出色的工作定位。它將在其通用產品線中增加重要的新產品，這將進一步提高其競爭地位，並提供更好的毛利率。
  • 隨著經濟走弱，亨德森尋求供應改善，部分成本下降。
  • 反過來，分析師認為，這將使 Extreme 能夠從其大而堅定的積壓中運送比預期更多的產品，從而導致收入和毛利率上升。
  • 與今年最具挑戰性的比較相比，街道預計第二季度收入將增長 9%，而每股盈利在指南的中點上升 14%。
  • 亨德森認為增長將超過 10％，EXTR 將擊敗每股收益，並將提高其對第三季度（CY1Q）和 23 財年的指南。
  • 此外，該分析師預計改善供應量，以允許 Extreme 降低庫存並增強其現金流。
  • 該分析師預測未來三個季度的收入增長了 12％。Henderson 認為，以高於 Extreme 預期的速度提高供應可用性，可能會推動此期間的收入增長 15% 以上。
  • 該分析師還認為毛利率有上升空間，收入的上升應該會推動營運成本的槓桿作用。
  • 價格行動： EXTR 股票在上次檢查星期一上漲 4.34%，報 19.70 美元。
  • 通過公司照片
声明：本內容僅用作提供資訊及教育之目的，不構成對任何特定投資或投資策略的推薦或認可。 更多信息
    搶先評論