May 30 (Reuters) - Shares of Infoblox Inc were set to open down 33 percent on Friday, a day after the network equipment maker warned of a lower-than-expected profit for the current quarter, hurt by contract delays and a slowdown in customer additions.
At least four brokerages lowered their rating to "hold" or equivalent, also highlighting concerns that a turnaround in the company's fortunes, which could last more than a year, would not be led by its chief executive of nearly 10 years, Robert Thomas.
At least seven brokerages lowered their price target on Infoblox's stock, with Goldman Sachs more than halving its target to $15. The stock was trading down 34 percent at $13.54 in premarket trading on Friday.
Analysts said they expect sales of the company's network automation products to remain weak, as IT customers were prioritizing network security over automation.
"It has become clear there is not a quick and easy fix for the sharp slowdown in product orders that began last October," Pacific Crest analyst Brent Bracelin wrote in a note.
The brokerage cut its rating on the stock to "sector perform" from "outperform".
Infoblox said it expected to break even or earn up to 2 cents per share on an adjusted basis in the quarter ending July. Analysts on average were expecting 6 cents per share, according to Thomson Reuters I/B/E/S.
The weakness could last longer, with Wedbush Securities analyst Sanjit Singh estimating a turnaround could take anything between three to six quarters as Infoblox could take up to nine months to book revenue from a sale.
Singh lowered his price target to $18 from $25 and has a "neutral" rating on the stock.
Analysts also raised concerns as to how the company would navigate the competitive network automation market after CEO Thomas left. Infoblox did not say when Thomas would step down.
The resignation could be another indicator that the market, long-term growth and operating margins of the company were likely less attractive than thought, Citigroup analysts wrote in a note. The brokerage lowered its price target to $15 from $25.
Shares of Infoblox have fallen about 38 percent this year to Thursday's close of $20.52. At that price the stock is more than three times it worth, according to StarMine's intrinsic valuation model, which takes analysts' five-year estimates and models the growth trajectory over a longer period of time.
The stock is also expensive. At Thursday's close, Infoblox traded at 59.9 times forward earnings, higher than an sector median of 18.4 times, according to Thomson Reuters StarMine. (Reporting By Lehar Maan in Bangalore; Editing by Savio D'Souza)