NEW YORK (TheStreet) -- Shares of Neustar, Inc. (NSR) are up 2.86% to $29.53 on very heavy trading volume this afternoon after it was reported that the company is considering a potential sale amid interest from private equity firms, sources told Reuters.

The company, which helps North American telecommunication carriers route calls and text messages, is working with JPMorgan Chase (JPM) - Get Report as it reviews possible options following a more than 40% drop in its share price year-to-date, sources said.

TheStreet Ratings team rates NEUSTAR INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate NEUSTAR INC (NSR) 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, attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 12.2%. Since the same quarter one year prior, revenues slightly increased by 7.8%. 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.
  • Even though the current debt-to-equity ratio is 1.46, it is still below the industry average, suggesting that this level of debt is acceptable within the IT Services industry. Despite the fact that NSR's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.32 is high and demonstrates strong liquidity.
  • Net operating cash flow has declined marginally to $75.71 million or 8.74% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, NEUSTAR INC has marginally lower results.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the IT Services industry average. The net income has decreased by 15.1% when compared to the same quarter one year ago, dropping from $43.40 million to $36.85 million.
  • You can view the full analysis from the report here: NSR Ratings Report

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