NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and increase in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 2.4%. Since the same quarter one year prior, revenues rose by 15.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- ADVENT SOFTWARE INC has improved earnings per share by 44.4% 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, ADVENT SOFTWARE INC increased its bottom line by earning $0.45 versus $0.40 in the prior year. This year, the market expects an improvement in earnings ($0.83 versus $0.45).
- ADVS has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Despite the fact that ADVS's debt-to-equity ratio is low, the quick ratio, which is currently 0.67, displays a potential problem in covering short-term cash needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Software industry and the overall market, ADVENT SOFTWARE INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- ADVS has underperformed the S&P 500 Index, declining 18.22% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
Advent Software, Inc. provides software and services that automate work flows and data across investment management organizations, as well as the information flows between an investment management organization and external parties. The company has a P/E ratio of 35.9, above the average computer software & services industry P/E ratio of 34.1 and above the S&P 500 P/E ratio of 17.7. Advent Software has a market cap of $1 billion and is part of the
industry. Shares are down 31.5% year to date as of the close of trading on Tuesday.
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