EXTR
Extreme Networks, Inc.
$23.29
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 307.3% above fair value
You pay
$23.29
Bear
$4.39
Fair
$5.72
Bull
$7.00
Bear
$4.39
-81.1%
6% stage 1 growth, 12% discount
Fair
$5.72
-75.4%
9% stage 1 growth, 12% discount
Bull
$7.00
-70.0%
12% stage 1 growth, 12% discount
Adjust Assumptions
9.5%
12.0%
3.0%
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
34%
Implied Market Multiple
75.1x
Market is pricing in (growth)
28.9%
vs 9.5% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (18 analysts)
$33.00
Divergence from AlphaVal
83%
Summary
Using a two-stage FCF DCF with 9% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $5.72 per share.
Warnings
Stock-based employee pay equals 210% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $33.00 (from 18 analysts). Our estimate is 83% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions