Rosenblatt analysts increased the price target for Calix (NYSE:CALX) to $45 from $35, maintaining a Buy rating, following the company’s reported Q2 earnings, which resulted in a stock price drop of more than 6% yesterday.

Despite anticipating that Calix's revenue growth will fall below 10% in 2025 due to broadband service providers (BSPs) reevaluating investment priorities and delaying network expansions, the analysts remain optimistic about the company's long-term prospects.

They highlighted Calix's unique cloud-based platform as a key strength, which supports profitable subscriber growth for BSP customers even amidst a slowdown in new network builds. Positive metrics such as gross margins (GMs), free cash flow (FCF), remaining performance obligations (RPOs), new customer additions, and new platform and managed services deals reinforce this optimistic outlook.

Calix anticipates receiving Broadband Equity, Access, and Deployment (BEAD) orders starting in early 2025, which should help the company return to double-digit top-line growth by the second half of 2025 and into 2026.