Technology

After Cisco Makes Daring Last-Minute M&A Buy, Are These Hot Companies Next?

The hottest tech initial public offering (IPO) deal in weeks was due to price this week, but tech giant Cisco Systems Inc. (NASDAQ: CSCO) put the kibosh on that yesterday when it bought AppDynamics two days before its debut as a public company for a reported $3.7 billion in cash and equity.

In a move that rarely happens, Cisco stepped in front of the IPO and offered approximately twice what the offering would have brought the company. The question for investors is who could be next? In a timely research note, the analysts at Stifel think more mergers and acquisitions could indeed be on the way. The also think the small and midcap companies are the likely targets.

Stifel cited 15 possible targets, but here we focus on five that are Buy rated and have had positive traction in their respective technology subsectors.

Barracuda Networks

This company recently reported very solid earnings. Barracuda Networks Inc. (NASDAQ: CUDA) designs and delivers security and data protection solutions. The company offers cloud-enabled solutions that enable customers address security threats, improve network performance, and protect and store their data.

Barracuda recently launched its new Vulnerability Remediation Service, expanding its award-winning Wed Activation Firewall product line further simplifying the way web application security is deployed and managed. The Vulnerability Remediation Service automates security policy enforcement, making application security easy for DevOps teams by reducing costs and complexities traditionally associated with auditing code or patching software.

The Stifel price target for the stock is $32, and the Wall Street consensus target is $29.29. The stock closed Wednesday at $23.76 per share.

FireEye

This stock was on fire a couple of years ago and has been absolutely eviscerated since. FireEye Inc. (NASDAQ: FEYE) has been mentioned over the years as a takeover target, and trading 85% below highs that were printed this time three years ago, it may indeed be on the radar.

The company provides cybersecurity solutions for detecting, preventing, analyzing and resolving cyberattacks. The company offers vector-specific appliance solutions that provide threat protection from network to endpoint for inbound and outbound network traffic that may contain sensitive information.

FireEye also offers Central Management System that provides cross-enterprise threat data correlation to identify and block attacks across multiple attack vectors. Its Threat Analytics Platform helps to identify and respond to cyber threats by correlating enterprise-generated security event data from any security product with real-time threat intelligence, and its Malware Analysis System helps to manually execute and inspect advanced malware, zero-day and other advanced cyberattacks embedded in files, email attachments and web objects.

Stifel has a $20 price target on the stock, and the consensus target is $16.58. The stock closed most recently at $13.02 a share.