NEW YORK (TheStreet) -- Shares of Planar Systems (PLNR) dropped 8.46% to $7.03 in morning trading Tuesday after Roth Capital downgraded the electronics company to "neutral" from "buy" and set a $7 price target.
The stock had been rising since Thursday when the company reported its first-quarter earnings that beat analysts' expectations. Planar posted earnings of 14 cents a share, which topped analysts' estimates of 9 cents a share. Revenue climbed 17% from the same quarter one year ago to $53.6 million, which beat the consensus estimate of $48.5 million for the first quarter.
More than 2 million shares had changed hands as of 11:03 a.m., compared to the average volume of 784,869.
Separately, TheStreet Ratings team rates PLANAR SYSTEMS INC as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PLANAR SYSTEMS INC (PLNR) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.7%. Since the same quarter one year prior, revenues rose by 17.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- PLNR's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.25, which illustrates the ability to avoid short-term cash problems.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, PLANAR SYSTEMS INC's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for PLANAR SYSTEMS INC is currently lower than what is desirable, coming in at 26.22%. Regardless of PLNR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.17% trails the industry average.
- You can view the full analysis from the report here: PLNR Ratings Report