Why Cloud Networking Company Extreme Networks Shares Are Diving Today
Portfolio Pulse from Lekha Gupta
Extreme Networks Inc (NASDAQ:EXTR) shares dropped over 6% after the company reduced its Q2 revenue guidance. The new forecast is between $294 million to $297 million, down from the previous range of $312 million to $327 million, and below the consensus estimate of $320.51 million. Despite a projected 41% Y/Y increase in subscription and support revenue, and an expectation for recurring revenue to make up 33% of total revenue, the company cited industry headwinds and longer sales cycles for the revision. The Q2 gross margin is expected to be at the higher end of the 59.5%-61.5% range. EXTR also repurchased $25 million in shares and reported a cash balance of $221.4 million. The Q2 earnings results will be announced on January 31, 2024.
January 09, 2024 | 11:56 am
News sentiment analysis
Sort by:
Descending
NEGATIVE IMPACT
Extreme Networks Inc (EXTR) shares fell after lowering Q2 revenue guidance, indicating potential industry headwinds and extended sales cycles.
The reduction in revenue guidance is a negative signal to investors, often leading to a decrease in stock price as it reflects potential underlying issues such as industry headwinds and longer sales cycles. The premarket drop of 6.39% is a direct reaction to this news, and it is likely that the stock will continue to experience short-term pressure until the company can demonstrate a return to stronger growth or better-than-expected earnings results.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100