NEW YORK (TheStreet) -- Shares of Concur Technologies Inc. (CNQR) are up 10.95% to $112 in pre-market trade after it was reported that the developer of software that helps businesses manage travel expenses, has explored a sale and approached companies including SAP SE (SAP) to gauge their interest, sources told Bloomberg.
Concur is working with an investment bank on the sale and also approached Oracle Corp. (ORCL) , sources added. Oracle decided not to pursue a transaction, a source said.
Concur stock closed at $100.95 yesterday, giving the company a market value of about $5.8 billion.
The growth of cloud computing, which involves distributing software through the Internet, is eating into traditional software sales, pushing companies into acquisitions to fend off new competitors, Bloomberg noted.
TheStreet Ratings team rates CONCUR TECHNOLOGIES INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CONCUR TECHNOLOGIES INC (CNQR) 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 11.5%. Since the same quarter one year prior, revenues rose by 28.6%. 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.
- CNQR's debt-to-equity ratio of 0.86 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that CNQR's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.83 is high and demonstrates strong liquidity.
- The gross profit margin for CONCUR TECHNOLOGIES INC is currently very high, coming in at 72.08%. Regardless of CNQR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CNQR's net profit margin of -0.01% significantly underperformed when compared to the industry average.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Software industry and the overall market, CONCUR TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has declined marginally to $25.47 million or 9.07% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: CNQR Ratings Report