Jefferies Thinks the Street Doesn't Get Calix (CALX); Stimulus Revs Bigger than Expected
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Price: $40.12 -0.64%
Rating Summary:
12 Buy, 7 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
12 Buy, 7 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Jefferies comments on Calix (Nasdaq: CALX) after spending time on channel checks and talks with Calix customers. Jefferies is keeping its $24.50 price target and Buy rating on the stock.
Jefferies comments that broadband stimulus deployments are generally on schedule "relative to original timelines. At this point, most Stimulus awardees are somewhere in the process of selecting vendors or beginning initial equipment deployments." Potential risks to the Stimulus program include: 1) fiber availability; and 2) professional services availability.
A significant shortage of fiber cabling exists, and Jefferies believes that "operators and consulting engineers have been adjusting to the tighter supply environment and getting their orders in early. Nonetheless, fiber availability may become a more significant risk going forward."
Jefferies believes that the Street is missing the picture on Calix, stemming from two key arguments: 1) the Street’s inability to quantify the size and timing of Stimulus revenue; and 2) investor conservatism born out of the perception that the Stimulus program keeps getting delayed. The firm believes that Calix will be able to recognize $65 million of stimulus revs in FY11, and $200 million in FY12.
For more analyst color on Calix, click here. For a ratings history on Calix, click here.
Calix shares are up 6 percent on the session.
Jefferies comments that broadband stimulus deployments are generally on schedule "relative to original timelines. At this point, most Stimulus awardees are somewhere in the process of selecting vendors or beginning initial equipment deployments." Potential risks to the Stimulus program include: 1) fiber availability; and 2) professional services availability.
A significant shortage of fiber cabling exists, and Jefferies believes that "operators and consulting engineers have been adjusting to the tighter supply environment and getting their orders in early. Nonetheless, fiber availability may become a more significant risk going forward."
Jefferies believes that the Street is missing the picture on Calix, stemming from two key arguments: 1) the Street’s inability to quantify the size and timing of Stimulus revenue; and 2) investor conservatism born out of the perception that the Stimulus program keeps getting delayed. The firm believes that Calix will be able to recognize $65 million of stimulus revs in FY11, and $200 million in FY12.
For more analyst color on Calix, click here. For a ratings history on Calix, click here.
Calix shares are up 6 percent on the session.
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