Calix Inc. Stock Upgraded (CALX)
Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model .
NEW YORK ( TheStreet) -- Calix (CALX"> CALX) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself.
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Highlights from the ratings report include:
- CALX has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.15, which illustrates the ability to avoid short-term cash problems.
- 45.20% is the gross profit margin for CALIX INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -7.19% is in-line with the industry average.
- CALIX INC's earnings per share declined by 27.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CALIX INC continued to lose money by earning -$0.60 versus -$1.19 in the prior year. This year, the market expects an improvement in earnings ($0.40 versus -$0.60).
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Communications Equipment industry average. The net income has significantly decreased by 26.1% when compared to the same quarter one year ago, falling from -$5.21 million to -$6.57 million.
- Net operating cash flow has significantly decreased to $2.86 million or 51.09% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
Calix, Inc. provides broadband communications access systems and software for fiber and copper-based network architectures that enable communications service providers (CSPs) to connect to their residential and business subscribers. Calix has a market cap of $419.8 million and is part of the technology sector and telecommunications industry. Shares are up 12.7% year to date as of the close of trading on Tuesday.