Clearfield (NASDAQ:CLFD) & Extreme Networks (NASDAQ:EXTR) Critical Review

Clearfield (NASDAQ:CLFD) and Extreme Networks (NASDAQ:EXTR) are both technology companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, dividends, profitability, risk and valuation.

Risk and Volatility

Clearfield has a beta of 2.11, suggesting that its stock price is 111% more volatile than the S&P 500. Comparatively, Extreme Networks has a beta of 1.76, suggesting that its stock price is 76% more volatile than the S&P 500.

Profitability

This table compares Clearfield and Extreme Networks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Clearfield	-4.71%	1.61%	1.45%
Extreme Networks	3.28%	88.88%	6.32%

Institutional & Insider Ownership

88.7% of Clearfield shares are held by institutional investors. Comparatively, 91.1% of Extreme Networks shares are held by institutional investors. 17.8% of Clearfield shares are held by insiders. Comparatively, 3.6% of Extreme Networks shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Clearfield and Extreme Networks”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Clearfield	$150.13 million	2.61	-$8.05 million	($0.51)	-56.67
Extreme Networks	$1.28 billion	2.20	$42.12 million	$0.31	69.84

Extreme Networks has higher revenue and earnings than Clearfield. Clearfield is trading at a lower price-to-earnings ratio than Extreme Networks, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for Clearfield and Extreme Networks, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Clearfield	1	1	5	0	2.57
Extreme Networks	0	2	7	0	2.78

Clearfield currently has a consensus target price of $41.75, indicating a potential upside of 44.46%. Extreme Networks has a consensus target price of $32.25, indicating a potential upside of 48.96%. Given Extreme Networks’ stronger consensus rating and higher possible upside, analysts clearly believe Extreme Networks is more favorable than Clearfield.

Summary

Extreme Networks beats Clearfield on 11 of the 14 factors compared between the two stocks.

About Clearfield

Clearfield, Inc. manufactures and sells various fiber connectivity products in the United States and internationally. The company offers FieldSmart, a series of panels, cabinets, wall boxes, and other enclosures; WaveSmart, an optical components integrated for signal coupling, splitting, termination, multiplexing, demultiplexing, and attenuation for integration within its fiber management platform; and active cabinet products. It also provides CraftSmart FiberFirst pedestals, an access terminal that offers a cable management and mounting bracket kit to support the deployment of access terminals; YOURx, an access terminal that provides flexibility with cable mid-span and internal splicing options; and FieldShield, a fiber pathway and protection method for reducing the cost of broadband deployment. In addition, the company offers fiber assemblies; fiber optic and copper cables, microducts, microduct accessories, and tools; and installation and connection accessories for fiber optic networks. It serves community broadband customers, multiple system operators, large regional service providers, and wireline/wireless national telco carriers. The company was formerly known as APA Enterprises, Inc. and changed its name to Clearfield, Inc. in January 2008. Clearfield, Inc. was incorpoarted in 1979 and is headquartered in Minneapolis, Minnesota.

About Extreme Networks

Extreme Networks, Inc. delivers cloud-driven networking solutions that leverage the powers of machine learning, artificial intelligence, analytics, and automation.
The company designs, develops, and manufactures wired and wireless network infrastructure equipment and develops the software for network management, policy, analytics, security, and access controls. Over 50,000 customers globally trust their end-to-end, cloud-driven networking solutions and rely on our top-rated services and support to accelerate their digital transformation efforts.