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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

.

NEW YORK (

TheStreet

)

-- Park Electrochemical

(NYSE:

PKE

) has been downgraded by TheStreet Ratings from buy to 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, good cash flow from operations and increase in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.

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Highlights from the ratings report include:

  • PKE's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 20.14, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has increased to $9.71 million or 39.77% when compared to the same quarter last year. In addition, PARK ELECTROCHEMICAL CORP has also vastly surpassed the industry average cash flow growth rate of -14.52%.
  • The net income growth from the same quarter one year ago has exceeded that of the Electronic Equipment, Instruments & Components industry average, but is less than that of the S&P 500. The net income increased by 0.2% when compared to the same quarter one year prior, going from $4.71 million to $4.72 million.
  • 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. When compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, PARK ELECTROCHEMICAL CORP's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for PARK ELECTROCHEMICAL CORP is currently lower than what is desirable, coming in at 30.37%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 11.89% is above that of the industry average.

Park Electrochemical Corp., through its subsidiaries, develops, manufactures, markets, and sells high-technology digital and radio frequency/microwave printed circuit material products primarily for the telecommunications, and Internet infrastructure and high-end computing markets worldwide. The company has a P/E ratio of 28.5, above the S&P 500 P/E ratio of 17.7. Park Electrochemical has a market cap of $619.4 million and is part of the technology sector and electronics industry. Shares are up 3.3% year to date as of the close of trading on Friday.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.