Update (9:53 a.m.): Updated with Friday market open information.
NEW YORK (TheStreet) -- Infoblox (BLOX) received three analyst downgrades on Friday. Goldman Sachs downgraded the stock to "neutral" and set a $15 price target. The firm noted revenue acceleration is on hold and the CEO is leaving.
Deutsche downgraded the stock to "hold" from "buy" and set an $18 price target. The firm noted the company cut its guidance, as two large deals were postponed this quarter.
Finally, Pacific Crest downgraded the stock to "sector perform." The firm said execution risks are too high, as the CEO is leaving.
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The stock was down 38.99% to $12.52 at 9:51 a.m. on Friday.
Separately, TheStreet Ratings team rates INFOBLOX INC as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate INFOBLOX INC (BLOX) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 35.4% when compared to the same quarter one year ago, falling from -$3.25 million to -$4.39 million.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, BLOX has underperformed the S&P 500 Index, declining 10.26% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Software industry and the overall market, INFOBLOX INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for INFOBLOX INC is currently very high, coming in at 77.92%. Regardless of BLOX's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BLOX's net profit margin of -7.21% significantly underperformed when compared to the industry average.
- INFOBLOX INC's earnings per share declined by 14.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, INFOBLOX INC continued to lose money by earning -$0.10 versus -$0.14 in the prior year. This year, the market expects an improvement in earnings ($0.32 versus -$0.10).
- You can view the full analysis from the report here: BLOX Ratings Report
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.