Has Calix’s 61% 2025 Rally Fully Reflected Broadband Growth Momentum?

• If you have been wondering whether Calix is still a buy after its big run up, this breakdown will help you decide if the current price really makes sense or if the upside has already been priced in.
• The stock is up 1.8% over the last week and 61.3% year to date, while returning 54.7% over the past year, despite being down slightly at -0.3% over the last month and still below its 3 year highs.
• Investors have been reacting to ongoing momentum in Calix's broadband and cloud platforms, as US infrastructure spending and rural broadband programs keep pushing new demand into the pipeline. At the same time, partnerships with regional service providers and expanding fiber deployments have reinforced the narrative that Calix is positioned as a key enabler of next generation connectivity.
• On our framework, Calix scores a 4 out of 6 valuation checks, suggesting the market is pricing in a lot of its growth story but not necessarily all of it. Next, we will walk through the standard valuation approaches, then finish with a more powerful, narrative-driven way to understand what those numbers really imply.

Calix delivered 54.7% returns over the last year. See how this stacks up to the rest of the Communications industry.

Approach 1: Calix Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a company is worth by projecting its future cash flows and then discounting them back to today in $ terms. For Calix, the model uses a 2 Stage Free Cash Flow to Equity approach, starting from last twelve month free cash flow of about $86.4 Million and projecting how this could grow as broadband demand and cloud platforms scale.

Analysts provide detailed estimates for the next few years, with free cash flow expected to reach around $195 Million by 2027. Simply Wall St then extrapolates this trajectory further, reaching roughly $331 Million by 2035. When all these future cash flows are discounted back, the intrinsic value for Calix comes out at about $75.15 per share. Relative to the current share price, this implies the stock is roughly 27.2% undervalued, suggesting the market is not fully pricing in the projected cash generation.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Calix is undervalued by 27.2%. Track this in your watchlist or portfolio, or discover 917 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Calix.

Approach 2: Calix Price vs Sales

For a company like Calix, which is focused on scaling its broadband and cloud platforms, the Price to Sales multiple is a useful way to value the business because it looks at how much investors are paying for each dollar of revenue, regardless of short term earnings volatility. In general, higher growth and lower risk are often associated with a higher multiple, while slower growth or greater uncertainty usually correspond to a lower, more conservative multiple.

Calix currently trades on a Price to Sales ratio of about 3.88x, which is noticeably above both the Communications industry average of around 1.84x and the peer group average of roughly 2.13x. To add more nuance, Simply Wall St calculates a Fair Ratio of 4.32x for Calix, which reflects the level that might be expected given its growth outlook, margins, industry position, size and risk profile. This firm specific Fair Ratio can be more informative than a simple peer or industry comparison because it adjusts for Calix specific fundamentals rather than assuming all companies deserve the same multiple.

Since the Fair Ratio of 4.32x is higher than the current 3.88x Price to Sales, this framework indicates that Calix may be modestly undervalued on a sales multiple basis.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1465 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Calix Narrative

Earlier we mentioned that there is an even better way to understand valuation, and on Simply Wall St this comes through Narratives, which let you connect your story about Calix to specific assumptions for its future revenue, earnings, margins and fair value. You can then compare that evolving fair value to today’s price to decide whether to buy, hold or sell, all within an easy Community page experience that updates dynamically as new news or earnings arrive. One investor might build a bullish Calix Narrative that leans into third generation AI platform adoption, international expansion and a higher fair value around the upper analyst range. Another might create a more cautious Narrative that stresses execution, competition and policy risks and lands closer to the lower end of estimated values. Both perspectives are transparently linked from story, to forecast, to valuation so you can see exactly what would need to be true for your view to make sense.

Do you think there's more to the story for Calix? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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