NEW YORK (AP) -- Infoblox's stock climbed Thursday as an analyst lifted the technology company's rating, saying consistent product revenue growth and accelerating security revenue could help it top revenue and earnings estimates over the next two years.
THE SPARK: Alex Kurtz of Sterne, Agee & Leach boosted Infoblox Inc. to "Buy" from "Neutral" and established a $47 price target.
THE BACKGROUND: Infoblox, based in Santa Clara, Calif., makes technology for data centers. The company, which went public in April of 2012, is benefiting from limited competition in a largely untapped area of the networking business, according to Kurtz.
THE ANALYSIS: Kurtz said in a client note that Infoblox should be able to maintain product revenue growth of about 25 percent over the next several years.
The analyst also believes the company's security and automation tools are likely to be accepted by new and existing customers as they become more familiar with the products, giving a boost to security revenue.
He raised his estimates for fiscal 2014 adjusted earnings per share to 55 cents from 51 cents and his revenue estimate to $278.8 million from $272.1 million. On average, analysts surveyed by FactSet expect Infoblox to earn 53 cents per share on revenue of $276.9 million.
SHARE ACTION: Up $1.01, or 2.5 percent, to $40.73 in afternoon trading. The stock has traded between $13.73 and $45.50 over the last year. It has more than doubled for the year to date.