Calix Shares Up 77.6% in 3 Months: What's Driving the Rally?
Despite coronavirus-induced challenges, shares of Calix, Inc. CALX have surged 77.6% compared with 50.3% growth of the industry in the past three months. The stock currently flaunts a Zacks Rank #1 (Strong Buy) and a VGM Score of B.
The San Jose, CA-based cloud and software platforms, systems and services provider has a trailing four-quarter positive earnings surprise of 43%, on average. The Zacks Consensus Estimate for its current-year earnings has been revised 22.2% upward in the past 60 days.
What Abets the Performance?
Calix is focused on providing the platforms that enable service providers to create services at a DevOps pace and provide their subscribers with an exceptional experience. In the first quarter of 2020, the company added 18 new customers from all segments of the market. It expanded the EXOS platform to more than 300 customers.
In the March quarter, Calix saw solid revenue growth and positive operating cash flow. The company witnessed a strong quarter with AXOS platform shipments increasing 50% year over year. It launched a series of enhanced services such as Network Capacity Assessment Service as well as added functionality to Managed Services that enable its customers to quickly respond to substantial increases in network traffic.
The company’s near-term focus is on catering 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. Furthermore, Calix is committed to aligning investments to its strategy and maintaining strong discipline over operating expenses. The company continues to align its services business with its all-platform model through the creation of higher differentiated-value services.
Calix’s team is focused on operational excellence and customer satisfaction. The company has several growth drivers in place and enjoys a strong foothold in its served markets. The transformation of Calix into a communications cloud and software platform business will manifest in improved financial performance over the long term. For the ongoing quarter, the company expects positive operating cash flow reflecting non-GAAP profitability and focus on working capital velocity. Thus, it seems as though CALX could have a bit more room to run in the near term.
Other Decent Choices
Some other top-ranked stocks in the broader industry are Ooma, Inc. OOMA, Acacia Communications, Inc. ACIA and Chegg, Inc. CHGG, each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ooma has a trailing four-quarter positive earnings surprise of 228.2%, on average.
Acacia has a trailing four-quarter positive earnings surprise of 17.7%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.
Chegg has a trailing four-quarter positive earnings surprise of 49.9%, on average.
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