Extreme Networks, Inc. (NASDAQ:EXTR) Financial Performance Analysis

• Extreme Networks has a ROIC of -5.01% and a WACC of 11.43%, indicating it is not generating sufficient returns to cover its cost of capital.
• Ciena Corporation shows better capital efficiency with positive ROIC to WACC ratio, unlike Extreme Networks.
• NetApp, Inc. demonstrates the highest capital efficiency among peers with a ROIC of 16.49% and a WACC of 9.58%, resulting in a ROIC to WACC ratio of 1.72.

Extreme Networks, Inc. (NASDAQ:EXTR) is a company that provides software-driven networking solutions for enterprises, data centers, and service providers. It competes with other technology firms like Juniper Networks, Ciena Corporation, Harmonic Inc., F5, Inc., and NetApp, Inc. These companies are all part of the networking and communications equipment industry, which is known for its rapid technological advancements and competitive landscape.

In analyzing Extreme Networks' financial performance, the focus is on its Return on Invested Capital (ROIC) compared to its Weighted Average Cost of Capital (WACC). Extreme Networks has a ROIC of -5.01% and a WACC of 11.43%, resulting in a ROIC to WACC ratio of -0.44. This negative ratio indicates that the company is not generating enough returns to cover its cost of capital, which could be concerning for investors.

When comparing Extreme Networks to its peers, Ciena Corporation has a ROIC of 2.97% and a WACC of 8.55%, with a ROIC to WACC ratio of 0.35, indicating better capital efficiency than Extreme Networks.

Harmonic Inc. and F5, Inc. show even stronger performance with ROIC to WACC ratios of 1.45 and 1.60, respectively. Harmonic's ROIC of 11.55% and F5's ROIC of 13.70% both exceed their respective WACCs, suggesting effective capital utilization. NetApp, Inc. stands out with a ROIC of 16.49% and a WACC of 9.58%, resulting in the highest ROIC to WACC ratio of 1.72 among the peers, highlighting its strong capital efficiency.