NEW YORK (TheStreet) -- Shares of EMC (EMC) were gaining 1.95% to $27.71 on Friday, following a report that PC manufacturer Dell could offer up to $30 a share to acquire the cloud computing and big data company.
A bid from Dell to acquire the company could come as soon as early next week, according to CNBC. Dell would reportedly maintain control of EMC's virtualization subsidiary VMware (VMW) in any potential deal.
Dell is reportedly still finalizing it's financing for the deal which sources told CNBC could cost at least $40 billion. On Wednesday, The Wall Street Journal reported that Dell is working with private-equity firm Silver Lake to buy EMC.
About 33.7 million shares of EMC were traded by 2:32 p.m. Friday, above the company's average trading volume of about 17.4 million shares a day.
TheStreet Ratings team rates EMC CORP/MA as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
We rate EMC CORP/MA (EMC) 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, 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 a generally disappointing performance in the stock itself, deteriorating net income 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 36.9%. Since the same quarter one year prior, revenues slightly increased by 3.3%. 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.
- Despite currently having a low debt-to-equity ratio of 0.37, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.89 is weak.
- Net operating cash flow has decreased to $1,033.00 million or 17.62% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, EMC has underperformed the S&P 500 Index, declining 14.85% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full analysis from the report here: EMC