Teledyne Technologies (TDY) Inks Deal to Buy Xena Networks
Teledyne Technologies Inc.’s TDY arm, Teledyne LeCroy, recently signed an agreement to acquire Xena Networks, a provider of high-speed Terabit Ethernet validation, quality assurance and production test solutions.
Benefits of the Transaction
The Xena Networks’ Terabit Ethernet traffic generation and network emulation products, with support of up to 800Gbps Terabit Ethernet data rates, will be a strong addition to Teledyne LeCroy’s portfolio of protocol testing. It will include Ethernet system validation engineers, quality assurance labs and production lines to test, evaluate and accept Ethernet components and systems.
Teledyne’s existing equipment manufacturers, who require high-performance Ethernet traffic generation to validate their product designs, will benefit from Xena’s in-depth Ethernet link training and auto-negotiation test capabilities.
TDY’s Prospects in Protocol Solutions
Teledyne LeCroy offers a wide range of protocol test solutions - from protocol analyzers to conformance testers. These solutions help reduce engineering development time, issue resolution cycles and overall costs and thus deliver high product quality, system reliability and customer satisfaction.
In August 2023, Teledyne LeCroy announced the validation testing of OakGate R350-G5-PowerPlus, with solid state drive power and sideband test capabilities. In July 2023, The Frontline RF Validation System received approval, which provides fully automated physical layer testing and approved conformance test suites. These developments reflect Teledyne LeCroy’s significant efforts to enhance its protocol test portfolio.
Per IndustryARC’s Report, the Protocol analyzer market size is forecast to reach $1.08 billion by 2025, at a CAGR of 2.6% during 2020-2025, owing to the acceleration in the development of network infrastructure equipment and customer premise equipment for the upcoming 5G. Such solid growth projections are likely to benefit Teledyne’s revenue generation prospects in the coming days, especially post-acquisition of Xena Networks.
Price Performance
In the past year, shares of TDY have gained 15% compared with the industry’s 12.1% increase.
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Zacks Rank & Key Picks
Teledyne currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the same industry are BAE Systems PLC BAESY, TransDigm Group Inc. TDG and Hexcel Corp. HXL. BAESY and TDG sport a Zacks Rank #1 (Strong Buy), while HXL carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
BAE Systems’ long-term earnings growth rate is pegged at 14%. The Zacks Consensus Estimate for 2023 sales indicates an improvement of 33.6% from that reported in 2022.
TransDigm’s long-term earnings growth rate is 25.6%. The Zacks Consensus Estimate for 2023 sales indicates an improvement of 21.1% from that reported in 2022.
Hexcel’s long-term earnings growth rate is 37.3%. The Zacks Consensus Estimate for 2023 sales indicates an improvement of 14.6% from that reported in 2022.
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