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CALX

Calix NYSE:CALX Stock Report

Last Price

US$59.16

Market Cap

US$3.9b

7D

3.7%

1Y

29.5%

Updated

06 Aug, 2022

Data

Company Financials +
CALX fundamental analysis
Snowflake Score
Valuation2/6
Future Growth1/6
Past Performance5/6
Financial Health6/6
Dividends0/6

CALX Stock Overview

Calix, Inc., together with its subsidiaries, provides cloud and software platforms, and systems and services in the United States, rest of Americas, Europe, the Middle East, Africa, and the Asia Pacific.

Calix Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Calix
Historical stock prices
Current Share PriceUS$59.16
52 Week HighUS$80.95
52 Week LowUS$31.59
Beta1.84
1 Month Change51.50%
3 Month Change55.64%
1 Year Change29.45%
3 Year Change909.56%
5 Year Change1,073.81%
Change since IPO291.79%

Recent News & Updates

Aug 07

Calix: Strong Growth Ahead, But Due For A Pullback

Calix is a profitable provider of cloud services supporting broadband technology. However, Calix is trading at an overvalued level, limiting the upside potential. The stock is also overbought and due for a pullback on profit taking. Calix (CALX) had a great run higher over the past two years as it increased from the single digits to its current price of just under $58. The company increased revenue from $424 million in 2019 to $736 million in the past 12 months. That's a 74% revenue increase. On the earnings side, Calix went from multiple years of being unprofitable to being consistently profitable since 2020. While the company experienced significant success in recent years, the stock reached an overbought and overvalued condition. Therefore, I think it is likely that the stock is at risk for a sell-off on profit taking as we head into the end of 2022. Calix provides cloud services and software that supports broadband service providers. The tools that Calix offers are analytics which helps enable broadband service providers to increase subscribers, customer loyalty, and revenue. These offerings are important to broadband service providers as it helps them improve their businesses, making them more attractive to customers. That makes Calix's offerings attractive and likely to grow. Valuation May Limit the Upside Calix is currently trading with a forward PE of 67 and a PEG ratio of 3.4. This is significantly higher than the S&P 500's (SPY) forward PE of 18.3 and PEG of 1.44. Calix is also trading higher than the Software Application industry's forward PE of 42, but is approximately on par with the industry's PEG of 3.5. Frankly, the Software Application industry is trading at a high valuation as compared to the broader market. Personally, I would prefer to see the forward PE and PEG ratio near or below the S&P 500's average. I would even accept Calix's PE and PEG to be slightly above the S&P 500's valuation due to the company's above-average growth. The growth companies that I cover typically trade with a PEG between 1 and 2 and have stocks that tend to perform well from this level. So, I would prefer to wait for a better valuation to present itself. Technical Perspective - Overbought stockcharts.com As you can see on the daily chart above, the price peaked at the end of 2021 along with the broader market's sell-off. While the price did recover since then, I don't think that it will take out the last high any time soon. The reason for this is because the macro economic conditions are likely to deteriorate as the Federal Reserve continues to increase interest rates. The Federal Reserve recently increased rates by 0.75% in July and are hinting at another increase of 0.50% in September. These series of interest rate increases which are targeted to help lower inflation, typically lead to a slowdown in lending which runs the risk of resulting in a recession. With that said, I think there will be another leg down for the broader market and most stocks including Calix. The housing market is already slowing down with a 5.4% sales decline in June 2022 for existing home sales and a 17% sales decline for new homes. Getting back to the chart, the RSI is currently overbought at 81. The MACD increased to about the level where the stock previously sold off. The money flow [CMF] also increased to a level where it typically begins to decline. So, overall the indicators are pointing to a possible pullback for the stock. That makes sense as investors and traders could be taking profits at these levels. The Good News I'm bullish on Calix for the long-term. However, I think it would be wise for investors to wait for a more attractive entry point. The company does have strong expected revenue growth of 14% and expected earnings growth of about 30% for 2023 (consensus). This can catalyze the stock from a more attractive valuation and technical level. Calix is experiencing strong demand for its offerings as evident in the 20% year-over-year revenue increase for Q2 2022. Calix is seeing some of its customers improving the subscriber experience to encourage customer retention. The business model for Calix's customers is known as broadband-as-a-service instead of merely providing internet service. Additional services from broadband providers may include domain registration, web hosting, email, and browser/software packages. The company has enough visibility to project a 25% revenue increase for Q3 2022. Calix is expected to average 20% earnings growth annually over the next 3 to 5 years. One of the factors that is driving the company's success is the shift from a licensing model to a subscription model. The company's AXOS product, which aims to increase service speeds, eliminate service disruptions, and to streamline operations, is now offered in subscription form. The subscription model provides steady, predictable revenue for Calix. Calix is seeing growth across the board from its broadband service provider customers which is driving strong growth. Another positive is that Calix reduced its revenue concentration risk over the past two to three years. The company previously had one customer comprising 19% of total revenue. Currently, the largest customer, Lumen (LUMN), comprises less than 10% of Calix's total revenue. Calix does have a risk if significant business is lost from a large customer. However, now the risk has been lessened as revenue is spread more broadly with a lower concentration revenue coming from one customer. Strong Balance Sheet/Cash Flow As Calix increased profitability over the past few years, the balance sheet and cash flow strengthened. Calix has $51.5 million in cash & equivalents with just $14.4 million in total debt. Back in 2019, Calix had $51 million in debt.

Shareholder Returns

CALXUS CommunicationsUS Market
7D3.7%0.8%1.0%
1Y29.5%-12.3%-12.9%

Return vs Industry: CALX exceeded the US Communications industry which returned -12.3% over the past year.

Return vs Market: CALX exceeded the US Market which returned -12.8% over the past year.

Price Volatility

Is CALX's price volatile compared to industry and market?
CALX volatility
CALX Average Weekly Movement9.4%
Communications Industry Average Movement8.3%
Market Average Movement7.9%
10% most volatile stocks in US Market17.1%
10% least volatile stocks in US Market3.2%

Stable Share Price: CALX is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: CALX's weekly volatility (9%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1999954Carl Russohttps://www.calix.com

Calix, Inc., together with its subsidiaries, provides cloud and software platforms, and systems and services in the United States, rest of Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company’s cloud and software platforms, and systems and services enable broadband service providers (BSPs) to provide a range of services. It provides Calix Cloud platform, a role-based analytics platform comprising Calix Marketing Cloud, Calix Support Cloud, and Calix Operations Cloud, which are configurable to display role-based insights and enable BSPs to anticipate and target new revenue-generating services and applications through mobile application.

Calix Fundamentals Summary

How do Calix's earnings and revenue compare to its market cap?
CALX fundamental statistics
Market CapUS$3.86b
Earnings (TTM)US$212.95m
Revenue (TTM)US$735.64m

18.1x

P/E Ratio

5.2x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
CALX income statement (TTM)
RevenueUS$735.64m
Cost of RevenueUS$362.94m
Gross ProfitUS$372.70m
Other ExpensesUS$159.75m
EarningsUS$212.95m

Last Reported Earnings

Jul 02, 2022

Next Earnings Date

n/a

Earnings per share (EPS)3.26
Gross Margin50.66%
Net Profit Margin28.95%
Debt/Equity Ratio0%

How did CALX perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is CALX undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for CALX?

Other financial metrics that can be useful for relative valuation.

CALX key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue5x
Enterprise Value/EBITDA55x
PEG Ratio-0.2x

Price to Earnings Ratio vs Peers

How does CALX's PE Ratio compare to its peers?

CALX PE Ratio vs Peers
The above table shows the PE ratio for CALX vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average38.3x
LITE Lumentum Holdings
33.8x29.3%US$6.3b
NTCT NetScout Systems
60.3xn/aUS$2.4b
EXTR Extreme Networks
40.6xn/aUS$1.8b
CIEN Ciena
18.6x20.6%US$7.9b
CALX Calix
18.1x-73.3%US$3.9b

Price-To-Earnings vs Peers: CALX is good value based on its Price-To-Earnings Ratio (18.1x) compared to the peer average (38.3x).


Price to Earnings Ratio vs Industry

How does CALX's PE Ratio compare vs other companies in the US Communications Industry?

Price-To-Earnings vs Industry: CALX is good value based on its Price-To-Earnings Ratio (18.1x) compared to the US Communications industry average (21.9x)


Price to Earnings Ratio vs Fair Ratio

What is CALX's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

CALX PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio18.1x
Fair PE Ratio5.9x

Price-To-Earnings vs Fair Ratio: CALX is expensive based on its Price-To-Earnings Ratio (18.1x) compared to the estimated Fair Price-To-Earnings Ratio (5.9x).


Share Price vs Fair Value

What is the Fair Price of CALX when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: CALX ($59.16) is trading above our estimate of fair value ($1.15)

Significantly Below Fair Value: CALX is trading above our estimate of fair value.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


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Future Growth

How is Calix forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


-73.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CALX's earnings are forecast to decline over the next 3 years (-73.3% per year).

Earnings vs Market: CALX's earnings are forecast to decline over the next 3 years (-73.3% per year).

High Growth Earnings: CALX's earnings are forecast to decline over the next 3 years.

Revenue vs Market: CALX's revenue (15.3% per year) is forecast to grow faster than the US market (7.9% per year).

High Growth Revenue: CALX's revenue (15.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if CALX's Return on Equity is forecast to be high in 3 years time


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Past Performance

How has Calix performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


80.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CALX has a high level of non-cash earnings.

Growing Profit Margin: CALX's current net profit margins (28.9%) are higher than last year (13.1%).


Past Earnings Growth Analysis

Earnings Trend: CALX has become profitable over the past 5 years, growing earnings by 80.3% per year.

Accelerating Growth: CALX's earnings growth over the past year (149.2%) exceeds its 5-year average (80.3% per year).

Earnings vs Industry: CALX earnings growth over the past year (149.2%) exceeded the Communications industry 42.1%.


Return on Equity

High ROE: CALX's Return on Equity (34.5%) is considered high.


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Financial Health

How is Calix's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: CALX's short term assets ($460.8M) exceed its short term liabilities ($131.2M).

Long Term Liabilities: CALX's short term assets ($460.8M) exceed its long term liabilities ($44.4M).


Debt to Equity History and Analysis

Debt Level: CALX is debt free.

Reducing Debt: CALX has no debt compared to 5 years ago when its debt to equity ratio was 0.4%.

Debt Coverage: CALX has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: CALX has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


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Dividend

What is Calix current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate CALX's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate CALX's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CALX's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CALX's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as CALX has not reported any payouts.


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Management

How experienced are the management team and are they aligned to shareholders interests?

4.1yrs

Average management tenure


CEO

Carl Russo (66 yo)

19.67yrs

Tenure

US$7,726,910

Compensation

Mr. Carl E. Russo has been the Chief Executive Officer of Calix Inc. (alternative name, Calix Networks, Inc) since December 2002 and also serves as its Chairman of the Board since July 2021. He served as P...


CEO Compensation Analysis

Compensation vs Market: Carl's total compensation ($USD7.73M) is about average for companies of similar size in the US market ($USD6.58M).

Compensation vs Earnings: Carl's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: CALX's management team is considered experienced (4.1 years average tenure).


Board Members

Experienced Board: CALX's board of directors are considered experienced (9.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: CALX insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.7%.


Top Shareholders

Company Information

Calix, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Calix, Inc.
  • Ticker: CALX
  • Exchange: NYSE
  • Founded: 1999
  • Industry: Communications Equipment
  • Sector: Tech
  • Implied Market Cap: US$3.860b
  • Shares outstanding: 65.24m
  • Website: https://www.calix.com

Number of Employees


Location

  • Calix, Inc.
  • 2777 Orchard Parkway
  • San Jose
  • California
  • 95134
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/06 00:00
End of Day Share Price2022/08/05 00:00
Earnings2022/07/02
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.