On Tuesday, an analyst from Roth/MKM increased the stock price target for Calix (NYSE: NYSE:CALX) shares to $44.00, up from the previous target of $43.00, while reiterating a Buy rating on the stock.
The firm noted that Calix's recent financial results presented a mix, with sales at the lower end but earnings per share (EPS) at the higher end of the company's guidance. The second quarter of 2024 is anticipated to be the low point for the company, with expectations for a modest sequential uptick in the third quarter.
The analyst pointed out that Calix's Managed Services segment is gaining traction, evidenced by a 9% sequential increase in remaining performance obligations (RPOs). Moreover, the Broadband Equity, Access, and Deployment (BEAD) program is expected to gain momentum in the second half of 2024 and into 2025, with 20 entities now approved. Still, the timing of these developments is still considered variable, which could put pressure on near-term sales and EPS projections.
In light of the mixed results and the fluidity in timing, the analyst has adjusted the company's financial forecasts downward for 2024 and 2025, while also initiating estimates for 2026. Despite the revisions, the analyst maintained a Buy rating, suggesting confidence in the company's long-term prospects. However, there is an expectation that the stock may experience some volatility as market estimates are likely to be revised downward in response to the latest developments.
The update from Roth/MKM comes as investors look for signs of stabilization in the tech sector, with Calix's performance and outlook providing a detailed view of the challenges and opportunities within the industry. As the market digests the revised estimates and price target, Calix's stock performance will be closely monitored by shareholders and analysts alike.
In other recent news, Calix, Inc. has been in the spotlight as the company reported Q1 2024 earnings, achieving a revenue of $226.3 million, meeting its guidance. However, the company is facing a decline in revenue due to larger customers re-evaluating their capital expenditures.
Amid these developments, multiple analyst firms have adjusted their price targets for Calix. JPMorgan boosted the price target to $41.00, citing accelerating approvals of State plans for the Broadband Equity, Access, and Deployment (BEAD) program.
On the other hand, Jefferies downgraded Calix from Buy to Hold and lowered the price target to $30.00, citing concerns about delays in the BEAD program. Craig-Hallum and Roth/MKM maintain a Buy rating with revised price targets of $41.00 and $43.00 respectively. These adjustments reflect recent developments in Calix's operations and market conditions.
Despite challenges, Calix's management anticipates a rebound in revenue growth, targeting a 20% growth rate for fiscal year 2025, driven by new network builds and government funding programs like BEAD.
InvestingPro Insights
Analyzing the current financial landscape of Calix (NYSE: CALX) through InvestingPro's real-time data reveals a company with a market capitalization of $2.31 billion and a high price-to-earnings (P/E) ratio of 117.73, indicating a premium valuation by the market. Despite the high earnings multiple, Calix's revenue growth over the last twelve months stands at 8.9%, showing the company is still expanding its top line.
InvestingPro Tips suggest a mixed picture; on one hand, Calix holds more cash than debt, providing financial stability, and analysts predict the company will be profitable this year. On the other hand, there is an anticipation of a sales decline in the current year, which may concern investors looking for consistent growth. Notably, the stock has experienced a strong return over the last three months, with a 33.39% price total return, which could signal investor optimism about the company's future performance.
For investors seeking a deeper analysis, InvestingPro offers additional tips on Calix, including insights on valuation multiples and profitability metrics. There are 13 more InvestingPro Tips available for Calix, which can be accessed by using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. These tips could provide valuable guidance for those considering an investment in Calix or looking to understand the company's position in the broader tech sector.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.