NEW YORK (TheStreet) -- URS Corporation (URS) shares are up 7.7% to $55.95 in trading today after being acquired by by rival AECOM(ACM) - Get Report for $56.31 per share or approximately $4 billion in cash and stock.
Including AECOM's assumption of URS debt, the total value of the deal will be about $6 billion.
AECOM shares are up 1.3% to $32.16 in pre-market trading on Monday.
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TheStreet Ratings team rates URS CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate URS CORP (URS) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The current debt-to-equity ratio, 0.55, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, URS has a quick ratio of 1.87, which demonstrates the ability of the company to cover short-term liquidity needs.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 13.3%. Since the same quarter one year prior, revenues slightly dropped by 9.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for URS CORP is currently extremely low, coming in at 5.91%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.06% trails that of the industry average.
- You can view the full analysis from the report here: URS Ratings Report