- Extreme Networks has a ROIC of -5.01% and a WACC of 11.42%, indicating it is not generating sufficient returns to cover its cost of capital.
- Juniper Networks and Ciena Corporation outperform Extreme Networks in generating returns relative to their cost of capital.
- Harmonic Inc., F5, Inc., and NetApp, Inc. show strong financial performance, with NetApp leading in terms of ROIC to WACC ratio.
Extreme Networks, Inc. (NASDAQ:EXTR) specializes in providing network infrastructure equipment and services, competing in a dynamic industry alongside Juniper Networks, Ciena Corporation, Harmonic Inc., F5, Inc., and NetApp, Inc. These companies are recognized for their significant contributions to networking solutions, each demonstrating varying degrees of financial performance.
In analyzing Extreme Networks, the focus is on its Return on Invested Capital (ROIC) of -5.01% compared to its Weighted Average Cost of Capital (WACC) of 11.42%, resulting in a ROIC to WACC ratio of -0.44. This indicates that the company is not generating enough returns to cover its cost of capital, which is a concern for investors.
When comparing Extreme Networks to its peers, Juniper Networks has a ROIC of 4.39% and a WACC of 7.21%, leading to a ROIC to WACC ratio of 0.61. This suggests that Juniper is more effective in generating returns relative to its cost of capital compared to Extreme Networks. Similarly, Ciena Corporation has a ROIC of 2.97% and a WACC of 8.58%, with a ROIC to WACC ratio of 0.35, also outperforming Extreme Networks.
Harmonic Inc. and F5, Inc. show even stronger financial performance. Harmonic has a ROIC of 11.76% and a WACC of 7.95%, resulting in a ROIC to WACC ratio of 1.48. F5, Inc. has a ROIC of 13.79% and a WACC of 8.57%, with a ROIC to WACC ratio of 1.61. Both companies are generating returns well above their cost of capital, indicating efficient capital utilization.
NetApp, Inc. stands out with the highest ROIC to WACC ratio of 1.73, with a ROIC of 16.49% and a WACC of 9.53%. This highlights NetApp’s strong financial performance and efficient use of capital, making it a leader among its peers in terms of generating returns relative to its cost of capital.
