NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and weak operating cash flow.
Highlights from the ratings report include:
- URS CORP has improved earnings per share by 13.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, URS CORP increased its bottom line by earning $3.55 versus $3.28 in the prior year. This year, the market expects an improvement in earnings ($3.65 versus $3.55).
- URS's revenue growth trails the industry average of 18.3%. Since the same quarter one year prior, revenues slightly increased by 4.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- URS has underperformed the S&P 500 Index, declining 23.49% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- 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. When compared to other companies in the Construction & Engineering industry and the overall market, URS CORP's return on equity is below that of both the industry average and the S&P 500.
URS Corporation provides engineering, construction, and technical services to public agencies and private sector clients worldwide. The company has a P/E ratio of 10.7, below the average diversified services industry P/E ratio of 11 and below the S&P 500 P/E ratio of 17.7. URS has a market cap of $2.7 billion and is part of the
industry. Shares are down 23.9% year to date as of the close of trading on Thursday.
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