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Infoblox (BLOX) Beating, Raising and Cheap - Stifel

December 1, 2015 8:49 AM EST
Get Alerts BLOX Hot Sheet
Price: $26.45 --0%

Rating Summary:
    5 Buy, 10 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 20 | Down: 14 | New: 22
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Infoblox (NYSE: BLOX) reported October quarter revenues of $94.0m, up 8.1% q/q and 40.9% y/y, above consensus expectations of $87.6m. EPS was $0.13, above consensus of $0.06. Overall, this was a good quarter with Stifel analyst, Sanjiv R. Wadhwani, stating that "while FY2017 growth will slow given the tailwind of the refresh in FY2016, at less than 2x our FY2017 revenues, the valuation remains attractive".

Revenue guidance for the January quarter was $93-95m, flat q/q and up 27% y/y at the midpoint, above consensus of $91.1m. For fiscal 2016, management guided for $370-380m, up 22% at the mid-point and raised fiscal 2016 operating margin targets to 10-12% (up from the 8%+ target previously). Management is driving operating margin leverage with its new 10-12% operating margin target for FY2016 (versus 8%+ previously).

Management also announced a $100m stock repurchase program with $50m to occur under an accelerated timeline.

Upgrades were meaningful with 25% of deals in the October quarter were related to the Dash-A refresh (similar to the July quarter). For January, management expects the range to remain the same, but Dash-A refresh revenues are likely to fall sequentially.

Security momentum was strong (now 12% of sales, up from 8% last quarter) and was up 54% sequentially and up 138% y/y. 2 of the largest 3 dales had a security component.

Infoblox is making inroads into the tier-1 service provider market with a large tier-1 deal in North America. While the company only signed 100 new customers (versus 200 over the last several quarters and a likely area of concern to watch), the number of large enterprise customers (with >10,000 employees) signed up was higher than the previous quarter

Infoblox hired 17 quota carrying sales people bringing total headcount to 117.

The firm maintained a Buy rating and $23 price target.

For an analyst ratings summary and ratings history on Infoblox click here. For more ratings news on Infoblox click here.

Shares of Infoblox closed at $15.04 yesterday.



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