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Synopsys SNPS recently revealed that it has completed the previously announced acquisition of the software-as-a-service (SaaS)-based security solution provider — WhiteHat Security — from NTT Application Security. The two companies entered into a definitive agreement in April 2022 when Synopsys agreed to buy WhiteHat for a total cash consideration of $330 million.
Acquired by NTT Security Corporation in 2019, WhiteHat is an application security pioneer and market-segment leading provider of dynamic application security testing (“DAST”) solutions.
WhiteHat to Enhance Synopsys’ AppSec Capabilities
The buyout of WhiteHat is anticipated to boost SNPS’ application security capabilities. The businesses of the two companies are strategically aligned with offering SaaS-based security testing services and integrating security into the software development life cycle.
Though both the companies offer DAST solutions, the acquisition of WhiteHat has brought an entirely new dimension to Synopsys DAST capabilities. With WhiteHat’s DAST solutions, software developers can scan security threats in the application’s production phase without the need for a separate test environment.
Synopsys, Inc. Price and Consensus
Synopsys, Inc. price-consensus-chart | Synopsys, Inc. Quote
Moreover, WhiteHat DAST’s continuous scanning feature detects and adapts to code changes, which ensures that the new functions added by a software developer are automatically tested. This means that the security testing solution keeps pace with the speed of software development processes and ensures that testing is consistently applied.
With this added capability, Synopsys customers will now be able to accelerate the time to market their applications while ensuring what is exposed to hackers has been tested as deployed.
Acquisitions Drive Growth
In recent years, acquisitions have been crucial to Synopsys’ growth. In September 2021, the company completed the acquisition of semiconductor and flat-panel display solutions from BISTel. The acquisition has broadened Synopsys’ industry-leading process control solutions with adaptive intelligence capabilities required by semiconductor fabs for enhancing manufacturing quality and efficiency.
In June last year, SNPS completed the buyout of Code Dx to provide customers with risk-reporting capabilities across correlated software vulnerability data. This purchase expanded its security applications portfolio.
In May 2021, it purchased MorethanIP, an Ethernet Digital Controller IP-supporting data rates provider, to expand its DesignWare Ethernet Controller IP portfolio. With the buyout, the company will be able to provide its customers with a complete low-latency, high-performance Ethernet IP solution for networking, AI, and cloud computing SoCs (system on a chip).
In November 2020, Synopsys bought Moortec, an in-chip monitoring solutions provider, for an undisclosed amount. The acquisition helped the company enhance its capabilities and strengthen the firm’s position on the Silicon Lifecycle Management Platform.
Synopsys is likely to pursue more acquisitions that strategically align with its current offerings. Along with investments in research & development, the buyouts are likely to strengthen the firm’s product offerings and clientele over the long run.
Zacks Rank & Other Key Picks
Currently, Synopsys carries a Zacks Rank #2 (Buy). Shares of SNPS have plunged 18.3% year to date (“YTD”).
Some other similar-ranked stocks worth considering from the broader technology sector are ON Semiconductor ON, Analog Devices ADI and MaxLinear MXL. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for ON's second-quarter 2022 earnings has been revised to $1.26 per share from $1.05 over the past 60 days. For 2022, earnings estimates have moved north by 17.5% to $4.91 per share in the past 60 days.
ON's earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 2.8%. Shares of ON have plunged 24.9% YTD.
The Zacks Consensus Estimate for Analog Devices' third-quarter fiscal 2022 earnings has been revised upward by 24 cents to $2.42 per share over the past 60 days. For fiscal 2022, earnings estimates have moved north by 9.6% to $9.24 per share in the past 60 days.
Analog Devices' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7.7%. Shares of ADI have decreased 16% YTD.
The Zacks Consensus Estimate for MaxLinear's second-quarter 2022 earnings has been revised upward by 10 cents to $1.02 per share over the past 60 days. For 2022, the Zacks Consensus Estimate for MaxLinear's earnings has moved north by 36 cents to $4.07 per share in the past 60 days.
MaxLinear's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 9.6%. Shares of MXL have plunged 55% YTD.
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