Broadcom to Snap Up AppNeta; Street Says Buy

Semiconductor and infrastructure software products manufacturer Broadcom Inc. (AVGO) recently revealed that it has acquired a SaaS-based network performance monitoring solutions provider, AppNeta. The terms of the deal have not been disclosed so far.

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Following the news, shares of the company rose marginally to close at $592.50 in Tuesday’s extended trading session.

Implications of the Deal

With the widespread adoption of SaaS, cloud and other strategies linked to the Internet, AppNeta’s solution addresses the need to deliver visibility into the end-user experience of any application, from any location and at any time.

This buyout will bring together AppNeta’s end-to-end visibility with Broadcom’s infrastructure and AIOps capabilities and will look to ensure smooth operations of its large enterprise customers.

Management Commentary

The Vice-President of Enterprise Software Division at Broadcom, Serge Lucio, said, “We are excited about the new Digital Experience Management (DEM) capabilities AppNeta will add to our DX NetOps network monitoring solutions. Hybrid cloud deployments, work from home and prevalence of SaaS-based applications have made enterprises incredibly reliant on the Internet to deliver business-critical applications to employees and customers.”

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Price Target

On December 7, Susquehanna analyst Christopher Rolland reiterated a Buy rating on the stock with a price target of $650, which implies upside potential of 10.1% from current levels.

Consensus among analysts is a Strong Buy based on 11 unanimous Buys. The average Broadcom stock price target of $632 implies an upside potential of 7.1% from current levels.

Smart Score

Broadcom scores a 7 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock is likely to perform in line with market expectations. Shares have gained about 39.4% over the past year.