Sensata Technologies Holding plc
ST
completed the earlier-announced acquisition of Dynapower Company LLC from private equity firm Pfingsten Partners for $580 million in an all-cash deal. Dynapower is a leading developer of high-voltage power conversion solutions for clean energy businesses. Sensata and Dynapower are well-poised to aid clean energy transition for clients and partners.
Dynapower’s product portfolio includes rectifiers, inverters, converters and custom transformers for renewable energy generation and green hydrogen production, electric vehicle charging stations, microgrid applications and industrial and defense applications.
The acquisition of Dynapower will give Sensata access to its lucrative addressable markets, including energy storage and power conversion systems for grid-tied renewable power conversion and green hydrogen production.
Per Sensata
, energy storage and power conversion systems for the grid-tied renewable power conversion market are valued at $800 million and likely to grow to $2.7 billion in 2030. The Green hydrogen production market is currently valued at $250 million and is expected to increase to a $2.6-billion market by 2030, driven by large private and public investments.
Sensata Technologies Holding N.V. Price and Consensus
Sensata Technologies Holding N.V. price-consensus-chart
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Sensata Technologies Holding N.V. Quote
Sensata added that Dynapower is expected to generate over $100 million in annualized revenue in 2022 and 20% EBITDA margins. The average annual revenue growth will be more than 30% through 2026.
Sensata’s Clean Energy Solutions strategy has been strengthened by the Dynapower acquisition, which follows the acquisitions of Lithium Balance, Gigavac and Spear Power System.
Sensata expects the Dynapower buyout to contribute more than 50% of the $500 million of acquired revenue needed to reach the company’s target of $2 billion in Electrification revenue by 2026, as delineated in Sensata’s recent Electrification Teach-In goals.
Headquartered in Attleboro, MA, Sensata is a global industrial technology company that develops, manufactures and sells innovative sensor-based solutions.
Sensata’s performance is gaining from strength in the Sensing Solutions business. However, global supply chain disruptions, a highly-leveraged balance sheet and increasing competition from low-cost suppliers are significant challenges for this Zacks Rank #3 (Hold) stock.
Stocks to Consider
A few better-ranked stocks from the broader technology sector worth consideration are
Synopsys
SNPS
,
Aspen Technology
AZPN
and
Broadcom
AVGO
. All the stocks sport a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $37.06 per share, up 4% in the past 60 days. AVGO’s long-term earnings growth rate is pegged at 14.5%.
Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, with the average being 2.2%. Shares of AVGO have increased 0.9% in the past year.
The Zacks Consensus Estimate for Synopsys 2022 earnings is pegged at $8.47 per share, rising 7.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 19.6%.
Synopsys earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 2.7%. Shares of SNPS have increased 9.1% in the past year.
The Zacks Consensus Estimate for Aspen’s fiscal 2022 earnings is pegged at $5.50 per share, rising 1.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 18.4%.
Aspen’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 4.1%. Shares of AZPN have grown 25.6% in the past year.
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