NEW YORK (TheStreet) -- Infoblox (BLOX) shares are down -5.8% to $12.21 on heavy volume on Monday after being downgraded to "sector perform" from "outperform" by analysts at Pacific Crest Securities.
The firm cited three straight quarters of lowered guidance and the departure of the company's CEO as the primary reasons for the lowered outlook.
They estimate that bookings decreased by -10% quarter over quarter and -5% year over year.
Must Read: Warren Buffett's 25 Favorite Stocks
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 multiple weaknesses, 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 deteriorating net income, weak operating cash flow 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 2795.7% when compared to the same quarter one year ago, falling from -$0.26 million to -$7.44 million.
- Net operating cash flow has decreased to $9.53 million or 27.08% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The share price of INFOBLOX INC has not done very well: it is down 14.43% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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 77.89%. 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 -12.19% significantly underperformed when compared to the industry average.
- You can view the full analysis from the report here: BLOX Ratings Report