Infoblox: Business Strong, Magnitude Unclear

• Shares of Infoblox, Inc. BLOX have declined over 24 percent in the last three months.
• Erik Suppiger of JMP Securities has maintained an Outperform rating and price target of $32 on Infoblox.
• Infoblox reported the fourth consecutive quarter of revenue growth acceleration for F4Q15, to 34 percent year-on-year.

For F4Q15, Infoblox reported its EPS ahead of the estimates and the consensus, while guided to revenue for F1Q16 ahead of the consensus and the estimates, with marginally lower than expected EPS.

The company also reported acceleration in product revenue growth to 45 percent year-on-year for F4Q15, from 32 percent in F3Q, “driven by improved sales execution, increased demand for Infoblox security solutions, and customer refreshes off an expiring platform,” the JMP report said.

Although there is limited visibility into the magnitude of the refresh cycle, Suppiger believes that the company’s business continues to be strong, mentioning that despite investor concerns “regarding the impact the expiration of the refresh will have on growth next year, we believe non-refresh business is robust and will sustain healthy growth.”