NEW YORK (TheStreet) -- Shares of comScore (SCOR) - Get Report are rising by 4.90% to $43.50 in pre-market trading on Wednesday morning, after the data analytics company acquired Rentrak (RENT) for $771 million in stock.
The boards of both companies have approved the deal and when completed comScore shareholders are expected to own approximately 66.5% and Rentrak shareholders are expected to own approximately 33.5% of the combined company.
"By combining comScore and Rentrak's products, talent and significant information assets, the new company will provide even more robust measurement solutions to the media and advertising industries, following the consumer whenever and wherever content is consumed," comScore said in a statement.
Rentrak is a provider of worldwide consumer viewership information to the entertainment and marketing industries.
Shares of Rentrak are jumping by 11.96% to $48.58 this morning.
The transaction is expected to be completed early next year.
Separately, TheStreet Ratings team rates COMSCORE INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
We rate COMSCORE INC (SCOR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SCOR's revenue growth has slightly outpaced the industry average of 7.1%. Since the same quarter one year prior, revenues rose by 14.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Although SCOR's debt-to-equity ratio of 0.07 is very low, it is currently higher than that of the industry average. To add to this, SCOR has a quick ratio of 1.99, which demonstrates the ability of the company to cover short-term liquidity needs.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 49.6% when compared to the same quarter one year ago, falling from -$3.20 million to -$4.79 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, COMSCORE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: SCOR