Cloud networking company Extreme Networks (NASDAQ: EXTR) fell in pre-market trading after it provided a business update for its second quarter. The company now expects its second-quarter revenue to be in the range of $294 to $297 million, compared to its prior outlook of between $312 million and $327 million. Analysts had forecast revenue of $320.5 million. Extreme Networks is likely to announce its second-quarter earnings on January 31.
The company estimates annualized subscription and support revenue to be around $430 million, thanks to a 41% year-over-year growth in subscriptions. Extreme Networks expects recurring revenue to comprise 33% of its total revenue in the second quarter.
Management clarified that the lowered outlook reflected industry challenges like extended sales cycles and its large deals shifting to later quarters. However, the company remained confident that it would achieve double-digit revenue growth over the long term.
Meanwhile, the company announced some leadership changes, with Norman Rice being elevated to Chief Commercial Officer. At the same time, its Chief Revenue Officer, Joe Vitalone, has resigned but will serve in an advisory role with the company.
What is the Price Forecast for EXTR Stock?
Analysts remain cautiously optimistic about EXTR stock with a Moderate Buy consensus rating based on two Buys and four Holds. Over the past year, EXTR stock has declined by more than 8%, and the average EXTR price target of $21 implies an upside potential of 19.86% at current levels.
