For the second time in four months, rumors are circulating that Synaptics (SYNA -1.81%) is the target of a China-based group interested in acquiring it. Similar to the first murmurings, which arose in late September, the board of the up-and-coming maker of mobile touch screens, fingerprint sensors, and similar technologies, was supposedly offered $110 per outstanding share.

When the "news" broke, Synaptics stock was sitting at $62.05 a share: It closed the following trading day above $78. Synaptics' stock has since eased a bit, but such a rapid jump might be cause for concern for growth investors afraid they missed the boat. What makes Synaptics still such an intriguing opportunity, however, is that even at these price levels it's a screaming steal with a world of upside.

Image courtesy of Synaptics

Moving forward
Much has been made of the expected slowdown in sales of high-end smartphones this year. The leading manufacturers are feeling the pressure, and that angst has spilled over to their suppliers, including Synaptics and competitor Microchip Technologies (MCHP 2.67%).

The recent news that Microchip is acquiring Atmel for $8.15 a share puts it directly in Synaptics sights as it relates to sensors, security, and the fast-growing smart car market. But Synaptics offers investors more upside than Microchip and others in the space, it's continuing to grow revenue -- albeit slowly for the time being -- and is focused on diversifying its product offerings.

Last quarter's $470.5 million in revenue was just a 2% improvement over the prior year. But thanks to strong management of expenses, gross margin grew about 30%, and net income rose to $0.96 a share, more than 60% higher than a year earlier. And Synaptics' financial results don't tell the whole story. Going forward -- with or without a strong smartphone market -- forays into cutting-edge technologies will determine Synaptics future, and it's looking awfully bright.

What tomorrow will bring
About 87% of Synaptics revenue last quarter was derived from its mobile division, and that figure is expected to rise to 90% in the current period. Consumers are making it clear that "mobile" doesn't apply to just smartphones and tablets: Connectivity is quickly becoming a must-have feature in a new car for many buyers.

A survey was conducted recently in which consumers who had just purchased cars were asked what they valued more: the vehicle's performance, or a connected infotainment system. Performance took a backseat to "connected." That's good news for Synaptics and its recently ramped-up automotive solutions business.

Synaptics boosted its smart car initiatives even further following the announcement that it had inked a deal with auto parts mega-supplier Valeo. The collaboration with France-based Valeo will result in the industry's "first automotive touchscreen that combines capacitive touch, ClearForce force sensing technology and haptic feedback (enhanced touch sensing)."

Another opportunity Synaptics is tackling head-on is the fast-growing wearables market. The popularity of fitness bands, smartwatches, and other wearable devices is expected to explode in the coming months and years. And Synaptics newest touchscreen solution is suitable for all those small devices and is already in production. It's worth monitoring what impact these new efforts will have in boosting Synaptics' top line in the coming quarters.

Yes, smartphone sales will be under pressure this year, but Synaptics will still prosper thanks to its product diversification efforts. There's also Synaptics' relative value for growth investors to consider.

Who doesn't love a bargain?
As of this writing, Microchip is trading at over 14 times future earnings, hardly expensive for one of the larger competitors in Synaptics' sandbox. But Microchip's current valuation appears steep when compared to Synaptics. At just 9.5 times projected revenue, Synaptics is an absolute bargain, and it looks even better from the eyes of industry analysts.

Synaptics has an average price target of over $86 a share, which is approximately 30% above its current price. No need to rely on rumors to justify giving Synaptics a good, long look. Its foray into burgeoning markets combined with its bargain-basement valuation are more than enough reasons to put Synaptics on your buy list.