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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified

Adobe Systems

(

ADBE

) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Adobe Systems as such a stock due to the following factors:

  • ADBE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $188.3 million.
  • ADBE traded 27,955 shares today in the pre-market hours as of 9:28 AM.
  • ADBE is down 2.3% today from yesterday's close.

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More details on ADBE:

Adobe Systems Incorporated operates as a diversified software company worldwide. The company operates in three segments: Digital Media, Digital Marketing, and Print and Publishing. ADBE has a PE ratio of 110.3. Currently there are 8 analysts that rate Adobe Systems a buy, no analysts rate it a sell, and 5 rate it a hold.

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The average volume for Adobe Systems has been 3.7 million shares per day over the past 30 days. Adobe Systems has a market cap of $30.7 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.41 and a short float of 1.3% with 1.82 days to cover. Shares are up 1.7% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Adobe Systems as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:

  • ADBE's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ADBE has a quick ratio of 2.47, which demonstrates the ability of the company to cover short-term liquidity needs.
  • ADBE, with its decline in revenue, underperformed when compared the industry average of 12.0%. Since the same quarter one year prior, revenues slightly dropped by 9.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • 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 Software industry. The net income has significantly decreased by 70.6% when compared to the same quarter one year ago, falling from $222.33 million to $65.32 million.
  • 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. When compared to other companies in the Software industry and the overall market, ADOBE SYSTEMS INC's return on equity is below that of both the industry average and the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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