Calix Inc: 5G Stock Up 50% in 2021, Fueled by Record Q1 Results

calix stockCalix Stock on a Tear; Outlook Is Bullish

Calix Inc (NYSE:CALX) is one of the best 5G stocks that few investors seem to be discussing around the water cooler or through video conferencing. But they should be.

When I wrote about CALX stock back in November, it was trading at $23.94. It has rallied by 85% since then. Calix stock has actually been outpacing the broader market for the past year. The stock is up 343% year-over-year and approximately 50% year-to-date.

Bullish investors have been sending tech stocks considerably higher over the last year. Some tech stocks have deserved the attention, but others have not. CALX stock is one of those tech stocks that comes by its eye-watering gains honestly.

In the third quarter of fiscal 2020, Calix Inc reported record revenue and earnings. It did the same in the fourth quarter. That helped the telecommunications equipment manufacturer enter 2021 on a strong financial footing.

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Just recently, Calix Inc did it again, reporting another quarter of record results that topped its own aggressive financial guidance. Those results included record net income, the company’s third consecutive quarter of positive free cash flow, and the highest reported cash balance in its history.

2020 was a fantastic year for Calix, but by all accounts, 2021 is shaping up to be even better.

Chart courtesy of StockCharts.com

CALX Stock Overview

Calix provides cloud and software platforms, systems, and services so its customers can “simplify their businesses, excite their subscribers, and grow their value.” (Source: “About,” Calix Inc, last accessed April 28, 2021.)

The company’s cloud and software platforms help communication services providers (CSPs) deliver a range of services, from basic voice and data to advanced broadband services. (Source: “Calix, Inc. (CALX),” Yahoo! Finance, last accessed April 29, 2021.)

Calix Inc focuses on CSP access networks, the portion of the network that manages available bandwidth and determines the range and quality of services that can be offered to subscribers.

The company’s solutions include “Calix Cloud,” “Experience eXtensible Operating System,” and “Access eXtensible Operating System.”

Record Q1 2021 Results

For the first quarter of fiscal 2021 (ended March 31, 2021), Calix announced that its total revenue increased 59% year-over-year to $162.1 million. That was above the high end of the company’s guidance range. Systems revenue increased 62% while Services revenue climbed 22%. (Source: “Letter to Shareholders,” Calix Inc April 27, 2021.)

The company’s domestic revenue in the first quarter was 83% of its total first-quarter revenue and increased by 53% year-over-year. Its international revenue was 17% of its total revenue and increased by 101% year-over-year.

Calix Inc reported record first-quarter 2021 net income of $20.6 million ($0.31 per share), versus a first-quarter 2020 net loss of $6.9 million ($0.12 loss per share).

Calix ended the first quarter of 2021 with cash, cash equivalents, and marketable securities of $150.0 million. That was a sequential increase of $16.2 million. The company generated positive operating cash flow for its seventh consecutive quarter and positive free cash flow for its third consecutive quarter.

Q2 2021 Guidance

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

  • Revenue in the range of $157.0 to $163.0 million, which at the midpoint represents a 434% increase over the Q2 2020 revenue of $119.0 million
  • Net income per share in the range of $0.24 to $0.28, up from a Q2 2020 net loss of $0.07 per share
  • Positive cash flow

Analyst Take

Calix stock has been trending consistently higher since the coronavirus-fueled crash in March 2020. The only real hiccup was the March 2021 sell-off in the broader tech sector.

But CALX stock has rebounded significantly since then. That’s in part because of the company’s record financial results, which included the first time Calix Inc reported positive first-quarter generally accepted accounting principles (GAAP) net income in its history.

The company started the second quarter of 2021 in the strongest financial position in its history, and it’s in a perfect position to execute its near- and long-term goals. That bodes well for Calix stock investors.