Intrinsic value of Calix - CALX

Previous Close

$8.30

  Intrinsic Value

$0.14

stock screener

  Rating & Target

str. sell

-98%

Previous close

$8.30

 
Intrinsic value

$0.14

 
Up/down potential

-98%

 
Rating

str. sell

We calculate the intrinsic value of CALX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  521
  533
  546
  562
  579
  597
  618
  640
  663
  689
  716
  745
  776
  809
  844
  881
  920
  961
  1,005
  1,051
  1,100
  1,151
  1,206
  1,263
  1,323
  1,386
  1,453
  1,523
  1,597
  1,674
Variable operating expenses, $m
  552
  565
  579
  595
  612
  632
  653
  676
  700
  727
  743
  774
  806
  840
  876
  915
  955
  998
  1,044
  1,092
  1,142
  1,195
  1,252
  1,311
  1,373
  1,439
  1,508
  1,581
  1,658
  1,738
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  552
  565
  579
  595
  612
  632
  653
  676
  700
  727
  743
  774
  806
  840
  876
  915
  955
  998
  1,044
  1,092
  1,142
  1,195
  1,252
  1,311
  1,373
  1,439
  1,508
  1,581
  1,658
  1,738
Operating income, $m
  -32
  -32
  -33
  -33
  -34
  -34
  -35
  -36
  -37
  -38
  -27
  -28
  -30
  -31
  -32
  -34
  -35
  -37
  -38
  -40
  -42
  -44
  -46
  -48
  -51
  -53
  -56
  -58
  -61
  -64
EBITDA, $m
  -14
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -33
  -35
  -36
  -38
  -40
  -42
  -44
Interest expense (income), $m
  0
  2
  2
  2
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  6
  6
  7
  8
  8
  9
  10
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
Earnings before tax, $m
  -33
  -34
  -34
  -35
  -36
  -37
  -38
  -39
  -41
  -42
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -47
  -50
  -52
  -55
  -58
  -61
  -64
  -68
  -71
  -75
  -79
  -83
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -33
  -34
  -34
  -35
  -36
  -37
  -38
  -39
  -41
  -42
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -47
  -50
  -52
  -55
  -58
  -61
  -64
  -68
  -71
  -75
  -79
  -83

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  301
  308
  316
  325
  335
  346
  357
  370
  384
  399
  414
  431
  449
  468
  488
  510
  532
  556
  582
  608
  637
  666
  698
  731
  766
  802
  841
  881
  924
  969
Adjusted assets (=assets-cash), $m
  301
  308
  316
  325
  335
  346
  357
  370
  384
  399
  414
  431
  449
  468
  488
  510
  532
  556
  582
  608
  637
  666
  698
  731
  766
  802
  841
  881
  924
  969
Revenue / Adjusted assets
  1.731
  1.731
  1.728
  1.729
  1.728
  1.725
  1.731
  1.730
  1.727
  1.727
  1.729
  1.729
  1.728
  1.729
  1.730
  1.727
  1.729
  1.728
  1.727
  1.729
  1.727
  1.728
  1.728
  1.728
  1.727
  1.728
  1.728
  1.729
  1.728
  1.728
Average production assets, $m
  77
  78
  80
  83
  85
  88
  91
  94
  98
  101
  105
  110
  114
  119
  124
  129
  135
  141
  148
  155
  162
  169
  177
  186
  194
  204
  214
  224
  235
  246
Working capital, $m
  25
  26
  26
  27
  28
  29
  30
  31
  32
  33
  34
  36
  37
  39
  41
  42
  44
  46
  48
  50
  53
  55
  58
  61
  63
  67
  70
  73
  77
  80
Total debt, $m
  33
  37
  41
  45
  50
  56
  62
  68
  75
  83
  91
  99
  108
  118
  128
  139
  151
  163
  176
  190
  204
  219
  235
  252
  270
  288
  308
  328
  350
  373
Total liabilities, $m
  153
  157
  161
  165
  170
  176
  182
  188
  195
  203
  211
  219
  229
  238
  249
  259
  271
  283
  296
  310
  324
  339
  355
  372
  390
  408
  428
  449
  470
  493
Total equity, $m
  148
  151
  155
  160
  164
  170
  176
  182
  188
  196
  203
  212
  221
  230
  240
  250
  261
  273
  286
  299
  313
  327
  343
  359
  376
  394
  413
  433
  454
  476
Total liabilities and equity, $m
  301
  308
  316
  325
  334
  346
  358
  370
  383
  399
  414
  431
  450
  468
  489
  509
  532
  556
  582
  609
  637
  666
  698
  731
  766
  802
  841
  882
  924
  969
Debt-to-equity ratio
  0.220
  0.240
  0.260
  0.280
  0.310
  0.330
  0.350
  0.380
  0.400
  0.420
  0.450
  0.470
  0.490
  0.510
  0.540
  0.560
  0.580
  0.600
  0.620
  0.630
  0.650
  0.670
  0.690
  0.700
  0.720
  0.730
  0.750
  0.760
  0.770
  0.780
Adjusted equity ratio
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -33
  -34
  -34
  -35
  -36
  -37
  -38
  -39
  -41
  -42
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -47
  -50
  -52
  -55
  -58
  -61
  -64
  -68
  -71
  -75
  -79
  -83
Depreciation, amort., depletion, $m
  18
  18
  18
  18
  19
  19
  19
  19
  20
  20
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  17
  18
  19
  19
  20
Funds from operations, $m
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -46
  -48
  -51
  -53
  -56
  -59
  -63
Change in working capital, $m
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
Cash from operations, $m
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -29
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -44
  -46
  -48
  -51
  -54
  -57
  -60
  -63
  -66
Maintenance CAPEX, $m
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -19
New CAPEX, $m
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
Cash from investing activities, $m
  -8
  -8
  -8
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -15
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -27
  -28
  -30
  -30
Free cash flow, $m
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -47
  -50
  -52
  -55
  -58
  -61
  -64
  -68
  -71
  -75
  -79
  -83
  -88
  -92
  -97
Issuance/(repayment) of debt, $m
  3
  4
  4
  5
  5
  6
  6
  6
  7
  7
  8
  9
  9
  10
  10
  11
  12
  12
  13
  14
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
Issuance/(repurchase) of shares, $m
  36
  37
  38
  40
  41
  42
  44
  46
  47
  49
  40
  42
  44
  46
  49
  51
  54
  57
  60
  63
  66
  70
  73
  77
  81
  86
  90
  95
  100
  105
Cash from financing (excl. dividends), $m  
  39
  41
  42
  45
  46
  48
  50
  52
  54
  56
  48
  51
  53
  56
  59
  62
  66
  69
  73
  77
  80
  85
  89
  94
  99
  105
  110
  116
  122
  128
Total cash flow (excl. dividends), $m
  16
  16
  17
  18
  18
  19
  20
  20
  21
  22
  11
  12
  12
  13
  14
  15
  15
  16
  17
  18
  19
  20
  21
  23
  24
  25
  26
  28
  29
  31
Retained Cash Flow (-), $m
  -36
  -37
  -38
  -40
  -41
  -42
  -44
  -46
  -47
  -49
  -40
  -42
  -44
  -46
  -49
  -51
  -54
  -57
  -60
  -63
  -66
  -70
  -73
  -77
  -81
  -86
  -90
  -95
  -100
  -105
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -20
  -21
  -21
  -22
  -23
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -33
  -35
  -36
  -38
  -40
  -42
  -45
  -47
  -49
  -52
  -55
  -57
  -60
  -64
  -67
  -71
  -74
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  -19
  -19
  -19
  -18
  -18
  -17
  -16
  -16
  -15
  -14
  -14
  -13
  -12
  -11
  -10
  -9
  -8
  -7
  -7
  -6
  -5
  -4
  -3
  -3
  -2
  -2
  -1
  -1
  -1
  -1
Current shareholders' claim on cash, %
  92.4
  85.4
  78.8
  72.7
  67.0
  61.8
  56.9
  52.4
  48.3
  44.4
  41.7
  39.0
  36.6
  34.2
  32.0
  29.9
  27.9
  26.0
  24.3
  22.7
  21.1
  19.7
  18.3
  17.1
  15.9
  14.8
  13.7
  12.8
  11.9
  11.0

Calix, Inc. provides broadband communications access systems and software for fiber- and copper-based network architectures that enable communications service providers (CSPs), to transform their networks and connect to their residential and business subscribers. The Company enables CSPs to provide various services, from basic voice and data to advanced broadband services, over legacy and next-generation access networks. It develops and sells carrier-class hardware and cloud products. Its portfolio consists of three core systems and/or nodes: E-Series access systems and nodes (E-Series systems and nodes), B6 access nodes (B-Series nodes), and the C7 multiservice, multiprotocol access system (C-Series system). These systems and nodes are complemented by the P-Series optical network terminals and residential gateways, the GigaFamily of GigaCenters, GigaHubs, and GigaPoints, the Calix Management System, OpenLink Cable software and Compass Cloud family of software-as-a-service products.

FINANCIAL RATIOS  of  Calix (CALX)

Valuation Ratios
P/E Ratio -15.2
Price to Sales 0.9
Price to Book 1.9
Price to Tangible Book
Price to Cash Flow 17.1
Price to Free Cash Flow 29.3
Growth Rates
Sales Growth Rate 12.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 42.9%
Cap. Spend. - 3 Yr. Gr. Rate 7.4%
Financial Strength
Quick Ratio NaN
Current Ratio 0.3
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -8%
Ret/ On Assets - 3 Yr. Avg. -7%
Return On Total Capital -12%
Ret/ On T. Cap. - 3 Yr. Avg. -10%
Return On Equity -12%
Return On Equity - 3 Yr. Avg. -10%
Asset Turnover 1.4
Profitability Ratios
Gross Margin 43.8%
Gross Margin - 3 Yr. Avg. 45%
EBITDA Margin -2.8%
EBITDA Margin - 3 Yr. Avg. -0%
Operating Margin -6.1%
Oper. Margin - 3 Yr. Avg. -6%
Pre-Tax Margin -5.9%
Pre-Tax Margin - 3 Yr. Avg. -5.8%
Net Profit Margin -5.9%
Net Profit Margin - 3 Yr. Avg. -5.8%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. -1.7%
Payout Ratio 0%

CALX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CALX stock intrinsic value calculation we used $510.367 million for the last fiscal year's total revenue generated by Calix. The default revenue input number comes from 0001 income statement of Calix. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CALX stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for CALX is calculated based on our internal credit rating of Calix, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Calix.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CALX stock the variable cost ratio is equal to 106.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CALX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Calix.

Corporate tax rate of 27% is the nominal tax rate for Calix. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CALX stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CALX are equal to 14.7%.

Life of production assets of 12.1 years is the average useful life of capital assets used in Calix operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CALX is equal to 4.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $144.963 million for Calix - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 53.079 million for Calix is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Calix at the current share price and the inputted number of shares is $0.4 billion.

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COMPANY NEWS

▶ Calix moves global HQ, hundreds of employees to North San Jose   [Sep-06-18 10:22AM  American City Business Journals]
▶ Calix (CALX) Q2 Earnings Beat Estimates   [Aug-07-18 06:15PM  Zacks]
▶ Calix: 2Q Earnings Snapshot   [05:11PM  Associated Press]
▶ Calix: 1Q Earnings Snapshot   [May-08-18 05:49PM  Associated Press]
▶ Calix to Participate in Morgan Stanley Investor Conference   [Feb-21-18 04:01PM  GlobeNewswire]
▶ Calix reports 4Q loss   [Feb-13-18 04:21PM  Associated Press]
▶ Calix, Inc. to Host Earnings Call   [12:00PM  ACCESSWIRE]
▶ ETFs with exposure to Calix, Inc. : December 25, 2017   [Dec-25-17 11:45AM  Capital Cube]
▶ ETFs with exposure to Calix, Inc. : December 12, 2017   [Dec-12-17 12:55PM  Capital Cube]
▶ Calix reports 3Q loss   [Nov-07-17 04:51PM  Associated Press]
▶ Calix, Inc. to Host Earnings Call   [10:00AM  ACCESSWIRE]
▶ ETFs with exposure to Calix, Inc. : October 26, 2017   [Oct-26-17 10:23AM  Capital Cube]
▶ High Tech Financial Executive Cory Sindelar Named Calix CFO   [Oct-02-17 08:25AM  GlobeNewswire]
▶ ETFs with exposure to Calix, Inc. : September 1, 2017   [Sep-01-17 07:08PM  Capital Cube]
▶ Calix reports 2Q loss   [Aug-10-17 01:07AM  Associated Press]
▶ Calix Reports Second Quarter 2017 Financial Results   [Aug-08-17 04:01PM  GlobeNewswire]

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