Calix Inc: 5G Stock Up 152% YOY; Outlook for 2022 Is Bullish

Calix Inc Expected to Cap Incredible 2021 With Strong Full-Year Results

Calix Inc (NYSE:CALX) is one of the best 5G-related secrets on Wall Street. While the S&P 500 had a fantastic 2021, hitting 68 record highs and ending the year up by 26.9%, Calix stock had a pretty great year, too. It didn’t log 68 record highs in 2021, but it did notch up a total return of 167%.

That market-trouncing gain outstripped CALX stock’s peers. In 2021, the Defiance 5G Next Gen Connectivity ETF (NYSE:FIVG) rallied by 24.5%, while the First Trust Indxx NextG ETF (NASDAQ:NXTG) climbed by 20%.

Calix stock has made strong short-term gains, too. I last wrote about Calix Inc in September 2021, when it was trading at $53.45 per share. On December 31, CALX stock hit a new 52-week high of $83.25, for a three-month gain of 55%.

Trading at $73.65 as of this writing, Calix stock is up by:

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  • 12% month-over-month
  • 40% over the last three months
  • 58% over the last six months
  • 152% year-over-year

It’s impossible to predict what CALX stock, or any stock for that matter, will do this year, but if Calix Inc’s record third-quarter 2021 results are indicative of anything, it looks like 2022 will be another market-trumping year for Calix stock.

About CALX Stock

Calix offers cloud and software platforms “to enable service providers of all types and sizes to innovate and transform,” as well as “to simplify, excite and grow. ” Source: “Investor Relations,” Calix Inc, last accessed January 6, 2022.)

Calix’s platforms provide real-time data and insights to telecommunications companies and other organizations so they can simplify their business and deliver better experiences to their subscribers.

Calix Inc’s solutions are designed to help its clients to grow their subscriber numbers, customer loyalty, and revenues.

Another Record Quarter

For the third quarter ended October 2, 2021, Calix announced that its revenue increased by 14% year-over-year to $172.2 million. That was above the high end of management’s previous guidance range of $164.0 to $170.0 million. (Source: “Letter to Stockholders,” Calix Inc, October 26, 2021.)

The company reported record third-quarter gross margin of 52.0% and adjusted gross margin of 52.5%.

Calix Inc’s net income per share in the third quarter was $2.61, compared to $0.32 in the same period of the previous year. Its adjusted earnings per share came in at $0.35, above the company’s previous guidance range of $0.26 to $0.30.

Calix also reported its fifth consecutive quarter of positive free cash flow and the highest reported cash and investment balance in its history: $188.7 million.

Business Outlook

For the fourth quarter of 2021, Calix Inc expects to report:

  • Revenue in the range of $170.0 to $176.0 million, compared to $170.0 million in Q4 2020
  • Net income per share between $0.09 and $0.14, compared to $0.37 per share in Q4 2020
  • Positive cash flow

(Source: Ibid.)

While Calix Inc expects to report another strong quarter of demand for its products and services, it also expects that its revenue will continue to be impacted by supply chain constraints and logistical challenges.

Management’s guidance for annual revenue growth is between five percent and 10%, leaning toward the high side of the range for 2022.

Analyst Take

Calix Inc is one of the best overlooked 5G stocks.

Even with the COVID-19 pandemic and supply chain issues, the company has continued to report wonderful financial results. These results will likely get a boost as the economy strengthens and returns to normal, though this might not happen until later this year.

Regardless, Calix has a solid balance sheet on which to build and address the needs of its customers. It reported record third-quarter financial results, provided strong guidance, and entered 2022 in the strongest financial position in its history.