Calix: Recent Pullback Drives Bullish Update
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The Software Side of Life5.49K FollowersFollow5ShareSavePlay(10min)CommentsSummaryCalix, Inc. has experienced a notable stock pullback due to gross margin pressures from rising memory costs, but the reaction appears overdone.CALX's transition to a recurring revenue, higher-margin software platform is progressing, with Q1 revenue up 27% YoY and non-GAAP EPS at $0.40.Management expects gross margin headwinds to persist through 2026 but targets 100-200bps annual margin improvement starting in 2027, supporting strong EPS growth.The risk/reward skews positive: downside appears priced in, and execution on margin recovery could drive significant upside over the next two years. NicoElNino/iStock via Getty Images Calix, Inc. (CALX) has seen its stock fall under some pressure after the company warned of potential margin pressure given the rising prices across the memory ecosystem. Of course, this is something investors should be cautiousThis article was written byThe Software Side of Life5.49K FollowersFollowIndividual investor with hands-on experience in the equity markets. Largely focusing on Tech companies or major mispricings in the market.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.