NEW YORK ( TheStreet) -- Calix (NYSE: CALX) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.
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- CALX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 75.76%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Communications Equipment industry and the overall market, CALIX INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The revenue fell significantly faster than the industry average of 20.3%. Since the same quarter one year prior, revenues fell by 19.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- CALIX INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CALIX INC reported poor results of -$1.19 versus -$0.51 in the prior year. This year, the market expects an improvement in earnings ($0.12 versus -$1.19).
- 47.50% is the gross profit margin for CALIX INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -9.00% is in-line with the industry average.
-- Written by a member of TheStreet Ratings Staff