Infoblox Falls Ahead Of What Seems Will Be A Lukewarm Quarter

Shares of Infoblox Inc BLOX are down on Thursday morning, as the company prepares to announce its third quarter financial results after the market closes.

The company guided flat year-over-year earnings of $0.07 per share and a 22 percent growth in revenue, to $75 million – up from $61.02 million reported a year ago.

According to Estimize, experts are modeling consensus earnings in line with the management’s guidance, on revenue of $75.34 million. Meanwhile, the crowd projects earnings of $0.09 per share on slightly lower revenue of $75.09 million.

Two more things should be noted from the chart above. In the first place, current estimates imply a marked decline from the earnings of $0.11 per share reported in the third quarter of 2013. Secondly, the network controller company has a history of surpassing estimates and guidance; so, a beat this quarter should not be discarded.

Below is a history of Infoblox’s numbers for the past couple of years.

What Analysts Are Saying

In a recent report, Deutsche Bank analyst Vijay Bhagavathreiterated a Buy rating on Infoblox, raising his price target from $26.00 to $28.00. In the note, the expert commented, "We hosted a field trip for DB clients with the CEO and CFO of BLOX, earlier today at their HQ in Santa Clara. We are raising our Price Target from $26 to $28, based on our higher conviction on the company's near-term growth prospects in DNS Security and in the core IP Address Automation business."

In another report, Morgan Stanley takes a look at what’s ahead for Infoblox. The analysts explain that the company is expiring support for its early edition products (those acquired before 2012) by the end of 2015. "As a result, the company expects to see accelerated product sales for the next 4-5 quarters due to customers upgrading their equipment. While the company did not size the contribution this quarter (except to say it was less than ~$6mm in product sales) or what the potential installed base expected to upgrade was, we would note that it does not seem unreasonable to assume upgrades make up 10-20% of their product revenue for the coming year."