William Blair gave the Application Software industry some good news as it announced an upgrade on one of its stocks.

Rightnow Technologies Inc. (RNOW) [Chart - News - Analysis] was upgraded from Mkt Perform » Outperform on 10/23/2009---a positive sign for the stock that investors typically welcome. FYI, William Blair uses the following rating scale when analyzing stocks: Outperform, Mkt Perform, Underperform.

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Rightnow Technologies Inc. has an average analyst recommendation score of 2.5 and competes for investment dollars with Nuance Communications, Inc. (NUAN) [Chart - News - Analysis] and Microsoft Corporation (MSFT) [Chart - News - Analysis]---two other stocks in the Application Software industry that have average analyst recommendation scores of 1.6 and 2.1 respectively.

Analyst recommendations are averaged and scored using the following rating scale:

- 1.0 = Strong Buy

- 2.0 = Buy

- 3.0 = Hold

- 4.0 = Sell

- 5.0 = Strong Sell

Why are Upgrades and Initiations Good and Downgrades Bad?

One event that is almost certain to get a reaction from Wall Street is an analyst upgrade or downgrade. Everyone is looking for an edge in the stock market, and quite often, traders turn to stock analysts to get that edge.

Upgrades and coverage initiations are typically good for stocks because they show that analysts either believe that the stock is going to perform better in the future or that the stock is worth covering and providing analysis on.

Downgrades are typically bad for stocks because they show that analysts believe that the stock is going to perform worse in the future.

What is a Stock Analyst?

Check out the Understanding Stock Analyst Research and Recommendations video and article for more info.

A stock analysts is a person---typically employed by a large bank, investment firm or analysis company---who devotes his/her life to learning and making predictions about a company and its future performance.

Stock analysts sift through company reports and filings, talk to company management, probe customers and competitors and basically do whatever they can to find out if a company is healthy and growing or sick and shrinking. Because this is incredibly demanding work, stock analysts typically only monitor one or two companies at a time.

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August 10

Electric utility Dynegy Inc. (DYN) will be on headlines before the market opens Monday for its second-quarter results, as analysts are expecting a loss of $0.04 per share on revenues of $612.09 million. While reporting first-quarter results, the company revised its 2009 forecast, primarily to reflect lower commodity and capacity prices, accelerated timing of a Moss Landing plant outage from 2010 to 2009 and basis differentials, partially offset by the expansion of heat rates. Currently, Dynegy projects 2009 net loss to range between $520 million and $480 million, compared with previously communicated guidance range of loss $65 million - $140 million.

Engineering and construction company Fluor Corp. (FLR) is slated to release second-quarter upshot after the market closes Monday, with analysts forecasting earnings of $0.91 per share on revenues of $5.81 billion.

Food distributor SYSCO Corp. (SYY) will parcel out its final quarter results Monday, as analysts expect the company to post earnings of $0.49 per share on revenues of $9.20 billion. For fiscal 2009, the company projects capital expenditures to be in the range of $500 million - $550 million.

Allied Capital Corp. (ALD), Capstone Turbine Corp. (CPST), Boots and Coots International Well Control Inc. (WEL), Dish Network Corp. (DISH), Holly (HOC), Northgate Minerals Corp. (NXG), Nuance Communications Inc. (NUAN), Priceline.com (PCLN), Quest Software Inc. (QSFT), Quicksilver Resources (KWK) are among others to roll out quarterly results on Monday.

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