3 Stocks Pushing The Computer Software & Services Industry Lower

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.

The Computer Software & Services industry as a whole closed the day up 0.4% versus the S&P 500, which was up 0.1%. Laggards within the Computer Software & Services industry included TSR ( TSRI), down 1.7%, Intelligent Systems ( INS), down 1.9%, Bridgeline Digital ( BLIN), down 2.5%, Astea International ( ATEA), down 3.6% and ARI Network Services ( ARIS), down 2.6%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

Cvent ( CVT) is one of the companies that pushed the Computer Software & Services industry lower today. Cvent was down $1.13 (4.0%) to $27.07 on heavy volume. Throughout the day, 342,686 shares of Cvent exchanged hands as compared to its average daily volume of 191,800 shares. The stock ranged in price between $25.62-$27.80 after having opened the day at $27.58 as compared to the previous trading day's close of $28.20.

Cvent, Inc. provides a cloud-based enterprise event management platform with solutions for both sides of the events and meetings value chain primarily in North America. Cvent has a market cap of $1.2 billion and is part of the technology sector. Shares are down 22.5% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Cvent a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Cvent as a sell. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.

Highlights from TheStreet Ratings analysis on CVT go as follows:

  • CVT has underperformed the S&P 500 Index, declining 18.19% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • The gross profit margin for CVENT INC is currently very high, coming in at 77.61%. Regardless of CVT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CVT's net profit margin of 2.86% is significantly lower than the industry average.
  • Net operating cash flow has increased to $4.28 million or 12.88% when compared to the same quarter last year. Despite an increase in cash flow, CVENT INC's cash flow growth rate is still lower than the industry average growth rate of 25.79%.
  • Compared to other companies in the Internet Software & Services industry and the overall market, CVENT INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • CVT 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. To add to this, CVT has a quick ratio of 2.40, which demonstrates the ability of the company to cover short-term liquidity needs.

You can view the full analysis from the report here: Cvent Ratings Report

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At the close, ARI Network Services ( ARIS) was down $0.10 (2.6%) to $3.76 on heavy volume. Throughout the day, 164,384 shares of ARI Network Services exchanged hands as compared to its average daily volume of 16,400 shares. The stock ranged in price between $3.75-$4.00 after having opened the day at $3.80 as compared to the previous trading day's close of $3.86.

ARI Network Services has a market cap of $55.8 million and is part of the technology sector. Shares are up 18.7% year-to-date as of the close of trading on Tuesday. Currently there are no analysts who rate ARI Network Services a buy, no analysts rate it a sell, and 1 rates it a hold.

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Bridgeline Digital ( BLIN) was another company that pushed the Computer Software & Services industry lower today. Bridgeline Digital was down $0.02 (2.5%) to $0.74 on light volume. Throughout the day, 7,037 shares of Bridgeline Digital exchanged hands as compared to its average daily volume of 35,900 shares. The stock ranged in price between $0.71-$0.74 after having opened the day at $0.71 as compared to the previous trading day's close of $0.76.

Bridgeline Digital, Inc. develops iAPPS Web engagement management product platform and related digital solutions in the United States. Its iAPPS platform enables companies and developers to create Websites, Web applications, and online stores. Bridgeline Digital has a market cap of $16.2 million and is part of the technology sector. Shares are down 30.2% year-to-date as of the close of trading on Tuesday. Currently there is 1 analyst who rates Bridgeline Digital a buy, no analysts rate it a sell, and none rate it a hold.

TheStreet Ratings rates Bridgeline Digital as a sell. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

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Highlights from TheStreet Ratings analysis on BLIN go as follows:

  • 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, BRIDGELINE DIGITAL INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • BLIN has underperformed the S&P 500 Index, declining 25.00% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • BRIDGELINE DIGITAL INC has improved earnings per share by 40.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, BRIDGELINE DIGITAL INC reported poor results of -$0.23 versus -$0.07 in the prior year. For the next year, the market is expecting a contraction of 26.1% in earnings (-$0.29 versus -$0.23).
  • Despite currently having a low debt-to-equity ratio of 0.31, 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 0.95 is weak.
  • Net operating cash flow has increased to -$1.22 million or 14.87% when compared to the same quarter last year. Despite an increase in cash flow, BRIDGELINE DIGITAL INC's cash flow growth rate is still lower than the industry average growth rate of 25.79%.

You can view the full analysis from the report here: Bridgeline Digital Ratings Report

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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