CALX Stock Sinks On Q3 Memory Cost Warning – But These Analysts See A Buying Opportunity In The Dip

Calix said its third-quarter forecast reflects continued increases in memory component costs, which it expects will pass through over time.

• For Q3, the company guided revenue to be between $301 million and $307 million.
• In Q2, Calix’s revenue came in at $293.3 million and earnings per share at $0.47.
• Koyfin data shows that Wall Street is largely bullish on the stock, with five out of seven analysts covering CALX rating it a ‘Buy’ and the rest ‘Hold.’

Calix (CALX) attracted significant investor attention following the company’s warning about higher memory costs, causing shares to fall in Tuesday’s trading session. However, at least two analysts see the current pullback as a buying opportunity.

The company said in a letter to shareholders that its third-quarter forecast reflects continued increases in memory component costs, which would pass through over time, and that it plans to offset it by applying higher surcharge rates to new orders and adjusting monthly surcharges, among other things.

As of the writing, CALX stock was down more than 4%.

Roth And Rosenblatt’s Takeaway

Roth Capital noted the "mixed" third-quarter (Q3) outlook as Calix continued to navigate memory cost headwinds, which it thinks will weigh on earnings in the near-term, TheFly reported. The firm, however, expects headwinds to stabilize sometime later this year or early next year. The analyst maintained its ‘Buy’ rating and kept the $85 price target, which implies more than 121% upside potential as of the stock’s last closing price on Monday. It views the shares as "already discounted" and sees the weakness as an opportunity to increase investment position.

Rosenblatt also reportedly voiced similar commentary, saying it sees an attractive valuation on the post-earnings selloff. The firm noted the further decline in the company’s appliance margins, calling it disappointing, but expects it to find the bottom in the second half of 2026 as memory surcharges help offset increasing input costs.

The analyst stressed the importance of high software and services margins for the company, which it calls "extremely important to the long-term CALX thesis." The firm maintained a ‘Buy’ rating but lowered the price target to $55 from $70.

Koyfin data shows that Wall Street is largely bullish on the stock, with five out of seven analysts covering CALX rating it a ‘Buy’ and the rest ‘Hold.’

CALX Q3 Earnings Recap

For the second quarter, the company’s revenue rose 5% to $293.3 million, ahead of the Fiscal AI consensus estimate of $290 million. Earnings per share (EPS) came in at $0.47, ahead of the $0.40 estimate.

For Q3, it guided revenue to be between $301 million and $307 million, with the midpoint of the range ahead of the $302.7 million estimate. EPS was forecasted to come in between $0.37 and $0.45, with only the high end of the range matching the consensus estimate. Calix also said non-GAAP gross margins will decline 208 basis points sequentially and come in between 50.5% and 53.5%.

On Stocktwits, retail sentiment toward CALX remained in ‘bearish’ territory over the last 24 hours. CALX stock has declined more than 30% so far this year and over the past 12 months, underperforming the S&P 500.

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