Extreme Networks, Inc. (EXTR) vs Harmonic Inc. (HLIT)

Extreme Networks, Inc. and Harmonic Inc. are both Communication Equipment companies. Extreme Networks, Inc. is the larger, with a market value of $2.9B against $1.2B — 2.4× the size. Harmonic Inc. has negative trailing earnings, so its P/E is not meaningful; Extreme Networks, Inc. trades at 67.3×. Extreme Networks, Inc. grew revenue faster over the last twelve months: 12.6% against 11.2%. Extreme Networks, Inc. has the higher net margin (3.28% vs −10.6%) and the higher return on invested capital (96.6% vs 13.6%). Across the 21 metrics below, Extreme Networks, Inc. leads on 13 and Harmonic Inc. on 8.

Valuation

Metric EXTR HLIT Communication Equipment median
P/E 67.25 n/m 33.61
P/S 2.23 2.70 2.16
P/B 32.25 3.32 2.40
Price to free cash flow 30.31 22.19 25.02
EV/EBITDA 28.83 8.94 13.78
EV/Sales 2.19 2.42 2.27
Earnings yield 1.49% (3.81%) (0.65%)
Free cash flow yield 3.30% 4.51% 1.61%

Profitability

Metric EXTR HLIT Communication Equipment median
Gross margin 61.48% 50.01% 39.47%
Operating margin 4.88% 11.69% 2.39%
Net margin 3.28% (10.62%) (0.74%)
Free cash flow margin 7.42% 12.14% 1.39%
Return on equity 54.64% (11.69%) (1.91%)
Return on assets 3.61% (6.66%) (0.20%)
Return on invested capital 96.62% 13.56% 0.72%

Growth

Metric EXTR HLIT Communication Equipment median
Revenue growth (TTM) 12.59% 11.19% 11.48%
EPS growth (last fiscal year) 616.67% (215.15%) —
Revenue growth, 5-year CAGR 4.92% (0.99%) 4.92%
Net income growth, 5-year CAGR 85.15% 0.00% 0.00%

Health

Metric EXTR HLIT Communication Equipment median
Debt to equity 1.85 0.31 0.06
Current ratio 0.93 3.05 2.01
Net debt to EBITDA (0.49) (0.15) 0.67

Dividend

Metric EXTR HLIT Communication Equipment median
Dividend yield — — 2.63%
Payout ratio 0.00 0.00 0.00

Size

Metric EXTR HLIT Communication Equipment median
Market cap 2.86b 1.21b 563.45m

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