Imperva Inc: Why Imperva Stock is Going Nuts Today

Imperva StockImperva Stock Gets Ready to Steal the Limelight

The cybersecurity world has been making news for all the wrong reasons. However, Imperva Inc (NYSE:IMPV) stock is likely to be in the news for the right moves it has been making. As the cybersecurity industry is looking to consolidate itself, Imperva Inc has taken a step in the right direction, which means further upside for IMPV stock.

Imperva Inc has hired a boutique investment bank to advise it on the sale of its business. The industry giants Cisco Systems, Inc. (NASDAQ:CSCO) and International Business Machines Corp. (NYSE:IBM) are the most likely candidates to acquire the company.

Imperva Inc, the California-based security software company, supplies threat detection, breach prevention, and other data protection products for industries like health care and financial services. IMPV stock has come off the highs of the year, following its disappointing last quarter, when it missed the consensus estimates by a huge margin and provided weak guidance.

Imperva’s  president and CEO, Anthony Bettencourt said, “Longer-term, we believe that Imperva remains in position to reaccelerate growth due to our best-of-breed discovery, protection and compliance solutions.” (Source: “Imperva announces Second Quarter 2016 Financial Results,” Imperva Inc, August 4, 2016)

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Acquiring Imperva make sense for Cisco Systems Inc as the company tries to reshape its product portfolio to meet the changing demands of computer networking. CSCO stock has not shown much traction over the past many months, and Cisco needs to look at inorganic growth if it wants to pursue its strategy of better aligning its products with customers who are moving toward cloud computing.

International Business Machines Corp. has also recently started looking at security software in its efforts to seek new areas of growth amid declines in other businesses. IBM stock has gained about eight percent in the last year, when the broader S&P 500 has returned about 12%.

Recent news of a a data theft from 500 million users at Yahoo! Inc. (NASDAQ:YHOO) is yet another example of the many data breach stories in recent years. Earlier, Sony Corp (ADR) (NYSE:SNE) also experienced a high-profile security breach.

Imperva is a strong play in the data security space. Investors would be wise to look forward to the next two weeks, when a final announcement could be made. Whichever way the results go, IMPV stock is likely to look up.