UPDATE: Wedbush Securities Reiterates Neutral Rating, Lowers PT on Extreme Networks

In a report published Friday, Wedbush Securities reiterated its Neutral rating on Extreme Networks

, but slightly lowered its price target from $4.00 to $3.50. Wedbush Securities noted, “Company pre-announced lower-than-expected FQ2, citing macroeconomic factors, customer delays and competition, and outlines restructuring plan. Management cited aggressive bids, bundled offers from competitors causing longer sales cycles, in addition to macroeconomic issues plaguing EMEA. APAC faced some challenges due to the ongoing ramp of new sales teams. Bottom line, we think that competition contributed to slipped deals and the inability to convert sales opportunities across all regions. The main positive is that the company is implementing a plan to reduce spending by $7mn per quarter, through a combination of opex reductions and lower COGS, which we expect to be fully implemented by the company in FY14. We note that the company believes the restructuring plan will allow it to achieve its previously targeted 10% OM at a revenue level below $80mn and GM below 56%. As a result of the miss and the restructuring plan, we are going to remain conservative with our expectations and advise investors to remain on the sidelines until significant signs of execution and improvement in the spending environment emerge.” Extreme Networks closed on Thursday at $3.74.