TSC Ratings' Updates: Finish Line

We've upgraded URS(URS Quote), which provides engineering, construction and technical services, from hold to buy, driven by its robust revenue growth, growth in earnings per share, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and relatively strong performance when compared with the S&P 500 during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Revenue leaped by 104.1% since the same quarter last year, greatly exceeding the industry average of 41.3% growth. Net income improved by 70%, to $65.8 million, outperforming the S&P 500 and the construction and engineering industry. It's debt-to-equity ratio of 0.3 is low, though it is higher than the industry average. The company's quick ratio of 1.4 is sturdy.

EPS are up 8.2% in the most recent quarter compared with the same quarter last year. The company has demonstrated a pattern of positive earnings per share growth over the past two years, and we feel that this trend should continue. Shares are down 22%, reflecting, in part, the market's overall decline. Although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.

Other ratings changes include CommVault Systems(CVLT Quote), upgraded from sell to hold, and Kulicke & Soffa(KLIC Quote), downgraded from hold to sell.

All ratings changes generated on Jan. 7 are listed below.

Ticker Company Current Change Previous APSA Alto Palermo HOLD Upgrade SELL CODI Compass Diversified HOLD Upgrade SELL CVLT Commvault Systems HOLD Upgrade SELL DEG Delhaize Group BUY Upgrade HOLD FINL Finish Line SELL Downgrade HOLD FRD Friedman Industries BUY Upgrade HOLD KLIC Kulicke & Soffa SELL Downgrade HOLD PFOH Perpetual Federal Savings SELL Downgrade HOLD SLT Sterlite Industries SELL Initiated URS URS BUY Upgrade HOLD

Each business day, TheStreet.com Ratings updates its ratings on the stocks it covers. The proprietary ratings model projects a stock's total return potential over a 12-month period, including both price appreciation and dividends. Buy, hold or sell ratings designate how the Ratings group expects these stocks to perform against a general benchmark of the equities market and interest rates.

While the ratings model is quantitative, it uses both subjective and objective elements. For instance, subjective elements include expected equities market returns, future interest rates, implied industry outlook and company earnings forecasts. Objective elements include volatility of past operating revenue, financial strength and company cash flows.

However, the rating does not incorporate all of the factors that can alter a stock's performance. For example, it doesn't always factor in recent corporate or industry events that could affect the stock price, nor does it include recent technology developments and competitive dynamics that may affect the company.

For those reasons, we believe a rating alone cannot tell the whole story, and that it should be part of an investor's overall research.