Ericsson (NASDAQ:ERIC) and Calix (NYSE:CALX) Head to Head Review
by Michael Walen · The Markets DailyCalix (NYSE:CALX – Get Free Report) and Ericsson (NASDAQ:ERIC – Get Free Report) are both technology companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, earnings, risk, institutional ownership and profitability.
Profitability
This table compares Calix and Ericsson’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Calix | 4.61% | 6.17% | 4.90% |
| Ericsson | 10.72% | 20.63% | 7.61% |
Valuation and Earnings
This table compares Calix and Ericsson”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Calix | $1.00 billion | 2.21 | $17.88 million | $0.74 | 47.53 |
| Ericsson | $24.19 billion | 1.42 | $2.91 billion | $0.78 | 13.04 |
Ericsson has higher revenue and earnings than Calix. Ericsson is trading at a lower price-to-earnings ratio than Calix, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Calix has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500. Comparatively, Ericsson has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Calix and Ericsson, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Calix | 0 | 2 | 7 | 0 | 2.78 |
| Ericsson | 1 | 5 | 2 | 0 | 2.12 |
Calix currently has a consensus target price of $63.86, indicating a potential upside of 81.56%. Ericsson has a consensus target price of $11.00, indicating a potential upside of 8.16%. Given Calix’s stronger consensus rating and higher possible upside, analysts clearly believe Calix is more favorable than Ericsson.
Insider and Institutional Ownership
98.1% of Calix shares are owned by institutional investors. Comparatively, 8.0% of Ericsson shares are owned by institutional investors. 17.4% of Calix shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Summary
Calix beats Ericsson on 8 of the 14 factors compared between the two stocks.
About Calix
Calix, Inc., together with its subsidiaries, engages in the provision of cloud and software platforms, and systems and services in the United States, rest of Americas, Europe, the Middle East, Africa, and the Asia Pacific. Its cloud and software platforms, and systems and services enable broadband service providers (BSPs) to provide a range of services. The company provides Calix Cloud platform, a role-based analytics platform comprising Calix Engagement Cloud, Calix Service Cloud, and Calix Operations Cloud, which are configurable to display role-based insights and enable BSPs to anticipate and target new revenue-generating services and applications through mobile application, such as CommandIQ for residents and CommandWorx for businesses; Calix Intelligent Access EDGE, an access network solution for automated and intelligent networks; and Calix Revenue EDGE, a premises solution for subscriber managed services. It also offers SmartLife managed services, including SmartHome managed services and applications to enhance, operate and secure the connected experience of subscribers in their home; SmartTown managed services that reimagine community Wi-Fi as a ubiquitous, secure, and managed experience across a BSP's footprint; and SmartBiz managed services that address the business networking and productivity needs of business owners with an all-in-one managed service. In addition, the company provides Wi-Fi systems under GigaSpire and GigaPro brands to be ready for deployment as a complete subscriber experience solution for BSP's residential and business subscribers. It offers its products through its direct sales force and resellers. The company was incorporated in 1999 and is headquartered in San Jose, California.
About Ericsson
Telefonaktiebolaget LM Ericsson (publ), together with its subsidiaries, provides mobile connectivity solutions for telcom operators and enterprise customers in various sectors in North America, Europe, Latin America, the Middle East, Africa, North East Asia, South East Asia, Oceania, and India. It operates in four segments: Networks; Cloud Software and Services; Enterprise; and Other. The Networks segment offers radio access network (RAN) solutions for various network spectrum bands, including purpose-built and open RAN-prepared hardware and software. This segment also provides cloud RAN; transport solutions; passive and active antennas; and a range of service portfolios covering network deployment and support. The Cloud Software and Services segment offers core networks, business and operational support systems, network design and optimization, and managed network services. The Enterprise segment offers a global communications platform, including cloud-based unified communications as a service, contact center as a service, and communications platform as a service; enterprise wireless solutions comprising private wireless networks and wireless wan pre-packaged solutions; and technologies and new business solutions, such as mobile financial services, security solutions, and advertising services. The Other segment includes Redbee media that prepares and distributes live and video services for broadcasters, sports leagues, and communications service providers. It offers its services through wholesalers and distributors. The company was formerly known as Allmanna Telefon AB LM Ericsson and changed its name to Telefonaktiebolaget LM Ericsson (publ) in January 1926. Telefonaktiebolaget LM Ericsson (publ) was founded in 1876 and is headquartered in Stockholm, Sweden.