The engineering firm reportedly held talks with industry rivals and buyout firms about a potential sale. Activist investor Jana Partners hired Citigroup (C) - Get Citigroup Inc. Report and DBOPartners to gauge potential buyers' interest in the past few months according to the report.
It is not clear if and of the discussions led to offers, or will result in a deal.
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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 multiple strengths, 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.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 13.2%. 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.
- In its most recent trading session, URS has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
- URS CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, URS CORP reported lower earnings of $3.33 versus $4.17 in the prior year. For the next year, the market is expecting a contraction of 3.9% in earnings ($3.20 versus $3.33).
- You can view the full analysis from the report here: URS Ratings Report
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.