Deutsche Bank Upgrades Infoblox

Deutsche Bank upgraded Infoblox Inc. BLOX Monday from Hold to Buy and raised its price target from $17 to $23.

“BLOX is our small-cap idea to play the ongoing capex intensity in Enterprise Private Cloud buildouts – with IPAM and DNS Security, increasingly, a “need to have” to operate Cloud Scale networks,” according to the research note.

Analysts Vijay Bhagavath and Brian Modoff saw the “potential for +50 percent success rate in closing ongoing Proof of Concept product evals at large enterprise Cloud buildouts (we note +20 Cloud POCs in the US and Europe) involving BLOX’s high-end (and high unit ASP) IP Address Management and DNS Security solutions.”

Bhagavath also thought “the new CEO (ex CSCO SVP/GM) and head of sales (ex FFIV EMEA sales) could improve exposure for BLOX at major enterprise accounts in the US and Europe.”

“While DNS Security is currently less than 5 percent of FY revs, we see double-digit growth trends in BLOX’s DNS Firewall business, given DNS being noted as a prominent threat vector impacting large enterprises, in terms of DDOS attacks, etc [Arbor Networks study, etc]. BLOX is leveraging security specialists in the IT Channel to sell their DNS Security solutions – lowering sales opex overhead,” according Bhagavath.

Infoblox Inc. traded at $19.57 in the after hours session, up 1.14 percent.