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Here's Why Calix (CALX) is a Promising Pick for Investors

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Shares of Calix, Inc. (CALX - Free Report) have returned 69.2% in the past six months compared with 26.1% growth of the industry. Currently, the stock carries a Zacks Rank #2 (Buy) and has a VGM Score of B.



This San Jose, CA-based company delivered a trailing four-quarter earnings surprise of 72.2%, on average. The Zacks Consensus Estimate for its current-year earnings has been revised 67.3% upward over the past 60 days.

Growth Drivers

Calix is focused on providing the platforms that enable communications service providers (CSPs) to create services at a DevOps pace. The company launched a series of enhanced services such as Network Capacity Assessment Service and added functionality to Managed Services that enable its customers to quickly respond to significant increases in network traffic.

Calix announced a host of enhancements to the Revenue EDGE solution that enables CSP marketers to better identify subscribers who are working remotely and deliver best-in-class service. Also, it unveiled the new 10G PON Calix GigaPoint, which helps CSPs to future-proof not only their network capacity but also service offerings. The company continues to innovate to help service providers meet the burgeoning subscriber requirements with agility.

Calix’s near-term focus is on catering to the needs of its service provider customers. In the long term, it is focused on finding like-minded customers regardless of their type, size or location. Calix continues to align its services business with its All-Platform model through the introduction of higher differentiated-value services. It is committed to maintaining strong discipline over operating expenses along with a favorable product and customer mix.

Calix is providing its customers with the tools they need to respond to the unprecedented expansion of bandwidth demands. Service providers are leveraging Calix’s solutions to market differentiated services. Increasing cloud revenues with the rapid commercialization of innovative technology solutions such as the Revenue EDGE are likely to lead to accelerated network deployments, supported by accretive partnerships with multiple service providers.    

Calix’s team is focused on operational excellence and customer satisfaction. The transition of Calix into a communications cloud and software platform business is expected to manifest in improved financial performance over the long term. The company has several growth drivers in place and enjoys a strong foothold in its served markets. It is rational to believe that it has more upside left.

Other Key Choices

Some other top-ranked stocks in the broader industry are Plantronics , United States Cellular (USM - Free Report) and NIC , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Plantronics delivered a trailing four-quarter positive earnings surprise of 568.2%, on average.

U.S. Cellular delivered a trailing four-quarter positive earnings surprise of 231.1%, on average.

NIC delivered a trailing four-quarter positive earnings surprise of 27.5%, on average. The company’s earnings beat the Zacks Consensus Estimate in two of the last four quarters.

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