NEW YORK (TheStreet) -- Park Electrochemical (NYSE:PKE) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- PKE 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. Along with this, the company maintains a quick ratio of 12.36, which clearly demonstrates the ability to cover short-term cash needs.
- PARK ELECTROCHEMICAL CORP's earnings per share declined by 31.4% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, PARK ELECTROCHEMICAL CORP reported lower earnings of $1.13 versus $1.58 in the prior year. This year, the market expects an improvement in earnings ($1.33 versus $1.13).
- PKE, with its decline in revenue, slightly underperformed the industry average of 9.4%. Since the same quarter one year prior, revenues fell by 11.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- The change in net income from the same quarter one year ago has significantly exceeded that of the Electronic Equipment, Instruments & Components industry average, but is less than that of the S&P 500. The net income has significantly decreased by 31.9% when compared to the same quarter one year ago, falling from $7.24 million to $4.93 million.
-- Written by a member of TheStreet Ratings Staff
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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