Calix Inc
Calix, Inc. (NYSE: CALX) is a provider of cloud, software, and systems platform. The Company also manages services, which is focused on the subscriber-facing network, the portion of the network that governs available bandwidth and determines the range of services that can be offered to subscribers.
Recent Financial and Business Updates:
- CALX achieved its ninth consecutive quarter of sequential revenue growth, with a record revenue of USD 261.0 million. This marks a 4% increase from the previous quarter and a substantial 29% increase compared to the same quarter the previous year.
- The Revenue EDGE segment witnessed significant growth, with a 17% increase in revenue from the prior quarter and a remarkable 35% increase compared to the same quarter a year ago. This growth can be attributed to higher system shipments and continued subscriber additions by both new and existing customers.
- In the second quarter of 2023, CALX expanded its Calix Cloud deployments by adding 20 new deployments, encompassing Marketing Cloud, Support Cloud, and Operations Cloud. These deployments empower Broadband Service Providers (BSPs) to utilize data-driven insights to enhance net promoter scores. Additionally, CALX's Managed Services exhibited ongoing growth, with 15 new deployments in the same quarter. CALX currently offers nine managed services, including Wi-FiIQ, CommandIQ, ProtectIQ, ExperienceIQ, Arlo Secure, Bark, Servify, SmartBiz, and SmartTown.
- CALX's Remaining Performance Obligations (RPOs) increased to USD 213.0 million in the second quarter of 2023. This reflects a growth of USD 6.8 million (3%) from the previous quarter and an impressive USD 50.2 million (31%) increase compared to the same quarter a year ago. RPOs primarily consist of long-term commitments from customers, including Calix Cloud, managed services, extended warranties, and support/maintenance agreements.
- Gross margin continued to improve for the fourth consecutive quarter, reaching 52.3%. This represents a sequential increase of 110 basis points and a year-over-year increase of 270 basis points.
- CALX reported GAAP net income of USD 9.4 million for the second quarter of 2023, a slight decrease of approximately USD 0.2 million compared to the previous quarter. This decrease was primarily attributed to higher stock-based compensation. However, GAAP net income increased by USD 1.9 million compared to the same quarter the previous year.
- CALX concluded the second quarter of 2023 with a record cash and investments balance of USD 264.1 million, indicating a sequential increase of USD 7.1 million. This increase was primarily driven by positive non-GAAP free cash flow of USD 12.0 million and equity-based employee benefit plans of USD 5.8 million. Over the past year, CALX's cash and investments increased by USD 39.2 million, primarily due to proceeds from equity-based employee benefit plans of USD 31.4 million and positive free cash flow of USD 20.1 million. This increase was partially offset by USD 10.0 million in stock repurchases.
- CALX anticipates strong operating and free cash flow over the next year, attributed to sustained profitable growth and improvements in inventory management, along with the return of supplier inventory deposits as the supply chain normalizes.
Technical Observation (on the daily chart)
Currently, the stock has corrected by around 39.50% from its 52- week low dated December 13, 2022. The RSI (14 period) momentum indicator is close to overbought zone with a value of 61.92, with expectations of some consolidation or a short-term correction. Moreover, the price is currently positioned above both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term support levels.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to Calix, Inc. (NYSE: CALX) at the current market price of USD 46.98 as of September 07, 2023, at 08:20 am PDT.
Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
How to Read the Charts?
The yellow colour line reflects the 21-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.
The orange colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.
The red and green colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.
The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
The reference date for all price data, currency, technical indicators, support, and resistance levels is September 07, 2023. The reference data in this report has been partly sourced from REFINITIV.
Abbreviations
CMP: Current Market Price
SMA: Simple Moving Average
RSI: Relative Strength Index
USD: United States dollar
Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.
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