Total Reset on Infoblox — All Support Is Lost

February 11, 2014 by Jon C. Ogg

Hand plugging ethernet cable into wall socketInfoblox Inc. (NYSE: BLOX) is getting slaughtered after its earnings report. The network automation firm posted a surprise sequential revenue drop due to weak ordering trends. A weak January was augmented by weak federal orders.

What is so interesting here is that the revenue range is now $60 million to $61 million, down from the $65 million to $66 million previously offered. Earnings are now put in a range of $0.10 to $0.12 per share, up from a prior range of $0.09 to $0.11.

For the full year, Infoblox put revenue in a range of $250 million to $254 million, from a prior $270 million to $276 million range. The earnings range was lowered to $0.30 to $0.34 per share, versus a prior $0.44 to $0.54 per share. We showed the consensus closer to $275 million in revenue and $0.51 in earnings per share.

What has taken place here is a total reset of expectations. Infoblox shares lost one-quarter of their value after a poor outlook given back in November. This is a further disappointment, even if some think that the bar is being set very low.

We have at least three analyst downgrades on Infoblox as a result. Sterne Agee cut the rating to Neutral from Buy and slashed the price target to $20 from $47. Needham also downgraded Infoblox to Hold from Buy, and Wedbush downgraded the stock to Neutral from Outperform.

The prior consensus price target was $43.00, but that was before. Infoblox shares were down 48% at $17.22 Tuesday morning, after closing at $33.14 on Monday. The new 52-week range is $17.11 to $48.97. Another flag here is that the 13 million shares seen trading in almost an hour of trading is close to 12 times a normal day’s trading volume. Keep in mind that Infoblox came public less than two years ago.

Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)

Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.

Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.

Click here now to get started.