NEW YORK (TheStreet) -- Move (MOVE) shares are up 37.6% to $21.04 on Tuesday after News Corp. (NWS) purchased the online real estate company for $950 million in cash.
News Corp. paid a hefty premium for the site as the company reported 2013 revenue of $227 million, while its net income was just $574,000.
TheStreet has in-depth coverage of the acquisition here.
TheStreet Ratings team rates MOVE INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate MOVE INC (MOVE) 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, expanding profit margins 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, disappointing return on equity and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth significantly trails the industry average of 43.6%. Since the same quarter one year prior, revenues slightly increased by 6.7%. 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.
- The gross profit margin for MOVE INC is currently very high, coming in at 84.70%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -10.26% is in-line with the industry average.
- MOVE's debt-to-equity ratio of 0.79 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. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.11 is very high and demonstrates very strong liquidity.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet Software & Services industry. The net income has significantly decreased by 1450.4% when compared to the same quarter one year ago, falling from $0.47 million to -$6.29 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Internet Software & Services industry and the overall market, MOVE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: MOVE Ratings Report