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Bull Of The Day: Calix (CALX)

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Calix (CALX - Free Report) is a Zacks Rank #2 (Buy) that has the growth divergence that I love to see. Tech stocks need to show a higher growth style scores and a lower value score because that is just their nature. You want a tech name to be growing, not a solid value!  

Let's take a deeper look at CALX in this Bull of the Day article

Description

Calix, Inc. provides cloud and software platforms, and systems and services required to deliver the unified access network. The company's cloud and software platforms, and systems and services enable communication service providers (CSPs) to provide a range of services, such as basic voice and data, and advanced broadband services. The company offers Calix Cloud, an analytics platform that leverages network data and subscriber behavioral data to deliver analytics and intelligence to communications professionals. Calix, Inc. was founded in 1999 and is headquartered in San Jose, California.

Earnings History

CALX has a  great earnings history here with 4 straight beats of the Zacks Consensus Estimate.

The average positive earnings surprise over that time period is 43%, so these are good size beats.

Estimate Revisions

As a Zacks Rank #2  (Buy) I see only small increases and that says a lot. Maybe 4 weeks ago this would have been a Zacks Rank #1 (Strong Buy) but it is clear that estimates across the whole market are starting to rise.

This quarter the Zacks Consensus Estimate has increased by a penny over the last 60 days while next quarter has held still.

The full year number has increased by two cents to $0.24 while next year has also increased by the same amount to $0.51.

I see the earnings growth rate at 100%+ so that bodes well for long term holders.

Valuation

The valuation here is stiff with the forward PE of 62x and the price to book multiple at 5.6x is also a little high. Growth of 13% in the most recent quarter was probably impacted by COVID… so I am looking forward to those numbers lifting again soon. The price to sales multiple of 1.9x is nice to see (in that it is above 1x which tells me the market values each incremental dollar of revenue) and I am looking for some improvement in margins to continue.

Chart

Calix, Inc Price, Consensus and EPS Surprise

Calix, Inc Price, Consensus and EPS Surprise

Calix, Inc price-consensus-eps-surprise-chart | Calix, Inc Quote

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