Buy Calix stock? Here’s what this analyst says

Roth Capital analyst Scott Searle reiterated a “Buy” rating and $85.00 12-month price target on Calix (Calix Stock Quote, Chart, News, Analysts, Financials NYSE:CALX) in an April 22 earnings note, citing “solid 1Q26 results” and improved demand visibility.

“We are raising our estimates for 2026/27 based on improving demand/visibility, partially offset by increasing memory costs,” Searle said. “Given customer demand, the upside benefits of Calix One and faltering competition, we maintain our “Buy” and price target.”

Calix reported first-quarter revenue of $280.0-million, up 27% year-over-year and above the $278.0-million consensus, while EPS of $0.40 came in at the high end of guidance and ahead of the $0.38 Street view. Searle said the upside was driven mainly by strong customer demand, particularly in Appliances, where revenue rose 29.5% to $233.0-million. Software and Services revenue increased 16% to $47.1-million, supported by record current remaining performance obligations of $157.0-million, up 22% from a year earlier.

Gross margin of 57.2% was in line with guidance but down 80 basis points sequentially due to dual-cloud support costs of about $3.0-million to $4.0-million, or roughly $0.02 per share. Searle said memory costs were contained in the quarter by aggressive inventory purchases in the second half of 2025, but are expected to become a headwind in coming quarters.

Calix also raised its 2026 outlook, now calling for revenue growth of 15% to 20%, up from prior guidance of 10% to 15%. Searle said the stronger outlook mainly reflects improving customer demand and a greater second-half contribution from the company’s third-generation platform, Calix One. Second-quarter revenue guidance of $287.0-million to $293.0-million was also ahead of expectations, though the inclusion of memory surcharges beginning in May is expected to weigh on margins.

Searle said Calix One would be a key focus at the company’s April 22 analyst day in New York, where management was expected to highlight the platform’s monetization opportunities following full commercial integration across the installed base in the first quarter. He said the platform should help customers deploy revenue-generating services more quickly and could also open Tier 1 and international opportunities tied to private-network clouds and sovereign data centres.

“Additionally, it more readily opens Tier 1 and international opportunities with private network clouds and sovereign data centers — previously untapped markets,” Searle said. “We expect this to materialize in 2027.”

Calix generated $7.0-million in free cash flow in the quarter, repurchased $171.0-million of stock, or 3.3 million shares, and expanded its buyback authorization by $100.0-million. The company ended the quarter with $243.3-million in cash.

Searle expects Calix to generate $158.5-million in Adjusted EBITDA on $1.1736-billion in revenue in fiscal 2026, improving to $203.0-million in Adjusted EBITDA on $1.3101-billion in revenue in fiscal 2027.

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