International Business Machines (IBM) plans to acquire cybersecurity startup Randori for an undisclosed amount. IBM stock rose 1.2% to close at $142.88 on June 6.
New York-based IBM provides a range of IT products and services, including security solutions. Meanwhile, Boston-based Randori provides “attack surface management,” a solution that involves continuous monitoring of a client’s system to identify potential vulnerabilities. Randori offers security monitoring from a hacker’s perspective.
The startup is backed by investors such as Harmony Partners, Legion Capital, Accomplice, and .406 Ventures. According to Crunchbase data, Randori’s valuation falls in the range of $50 million to $100 million.
Cyberthreats Have Increased Amid the Cloud Shift
Amid the shift to cloud computing and the rise of hybrid work models, companies are seeing an increase in cyberthreats. IBM counts on the Randori acquisition to bolster its artificial intelligence-powered cybersecurity solutions. The transaction is expected to close in the coming months. Randori extends IBM’s acquisition streak, with four acquisition deals so far in 2022 and 20 companies acquired since April 2020.
Wall Street’s Take
The Street is cautiously optimistic about IBM stock with a Moderate Buy consensus rating, based on five Buys and four Holds. The average IBM price target of $152.11 implies 7.35% upside potential to current levels. Shares have increased more than 20% over the past six months.
TipRanks data shows that financial blogger opinions are 80% Bullish on IBM, compared to a sector average of 65%.
Key Takeaway for Investors
The global cybersecurity market is projected to surpass $500 billion by 2030, up from about $184.9 billion in 2021. Adding Randori to its portfolio could help IBM capture a larger share of the cybersecurity market.
Read full Disclosure