Extreme Networks falls as Craig-Hallum downgrades to 'hold' rating

Extreme Networks

19/04/2023 17:30

** Shares of network equipment company Extreme Networks Inc
 EXTR.O  fall 15% to $15.64 after Craig-Hallum downgrades to
"hold" from "buy"
    ** Brokerage downgrades after IT solutions provider CDW Corp
 CDW.O  reported prelim Q1 sales below estimates
    ** "We are surprised by the magnitude of the more cautious
spending outlook shift at CDW," Craig-Hallum analyst Christian
Schwab says
    ** This in turn "makes us more cautious regarding EXTR's
previous outlook for demand to remain strong and its backlog to
remain stable for several quarters before beginning to be worked
down," Schwab adds
    ** Schwab is also cautious about EXTR's previous
expectations of strong backlog of $542 mln to take until the end
of FY25 (Jun) to return to normalized $100 mln levels
    ** Earlier in the day, EXTR fell as much as 20.2% to a
three-month low of $14.67
    ** Co's CFO, Rémi Thomas, stepped down in January to pursue
another opportunity, triggering a share selloff 
    ** YTD, EXTR shares down 13.7% and CDW down 8% 

 (Reporting by Medha Singh)
 ((medha.singh@thomsonreuters.com))