Calix reported strong RPO metrics into BEAD orders, says Needham

Needham analyst Ryan Koontz keeps a Buy rating on Calix (CALX) with a $45 price target following last night’s Q3 report. The company continues to execute against its software transition as evidenced by solid remaining performance obligation growth, the analyst tells investors in a research note. The firm suspects larger customer cohort weakness is attributed Verizon, Brightspeed, Lumen, and CityFibre and could persist through 2024 due to interest rates and macro financial pressures. However, Needham is confident that Calix can maintain its strong market share in rural broadband. It attributes the “disappointing” near-term results to soft customer spending ahead of BEAD government subsidies, which are expected to begin shipping in the second half of 2025.