Is Calix, Inc. overvalued or undervalued?

As of 28 October 2024, the valuation grade for Calix, Inc. has moved from expensive to risky, indicating a shift in perception regarding its financial health. The company is currently assessed as overvalued, particularly given its negative profitability metrics and high valuation ratios. Key ratios include a Price to Book Value of 4.06, an EV to Sales ratio of 3.44, and an EV to Capital Employed of 5.81, all of which suggest that the stock may not be justified at its current price level.
In comparison to its peers, Calix, Inc. shows significant underperformance, with a P/E ratio of -148.45, while InterDigital, Inc. is rated attractive with a P/E of 43.22. Other risky peers like ViaSat, Inc. have a P/E of -14.05, highlighting the challenges faced by Calix in the telecom equipment sector. Despite recent stock performance, where Calix outperformed the S&P 500 with a year-to-date return of 83.65% compared to 12.22%, the underlying financial metrics suggest caution for potential investors.