NEW YORK (TheStreet) -- Oracle (ORCL) is reportedly close to acquiring Micros Systems (MCRS) for more than $5 billion. Shares of Micros Systems were gaining 16.6% Tuesday following reports of the deal. Oracle was gaining 0.9% to $42.54 a share.
Oracle and Micros are in exclusive talks according to Bloomberg, though there is a chance that the two companies won't reach an agreement.
Micros provides hardware, software, and software for the hospitality industry. The company reported $1.3 billion in sales in 2013, with a profit of $171 million.
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TheStreet Ratings team rates MICROS SYSTEMS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate MICROS SYSTEMS INC (MCRS) a BUY. This is driven by several positive factors, 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 revenue growth, reasonable valuation levels, solid stock price performance, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MCRS's revenue growth has slightly outpaced the industry average of 7.5%. Since the same quarter one year prior, revenues rose by 10.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 30.59% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MCRS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- MICROS SYSTEMS INC has improved earnings per share by 20.0% 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 two years. We feel that this trend should continue. During the past fiscal year, MICROS SYSTEMS INC increased its bottom line by earning $2.12 versus $2.04 in the prior year. This year, the market expects an improvement in earnings ($2.55 versus $2.12).
- Net operating cash flow has slightly increased to $75.54 million or 1.85% when compared to the same quarter last year. Despite an increase in cash flow, MICROS SYSTEMS INC's average is still marginally south of the industry average growth rate of 10.44%.
- You can view the full analysis from the report here: MCRS Ratings Report