NEW YORK (TheStreet) -- BJ's Restaurants  (BJRI) - Get Report was falling 10.5% to $25.95 Thursday after the company announced that it expects first-quarter consolidated restaurant level margins in the 15% to 16% range.

The company stated on a conference call to discuss its fourth-quarter earnings that consolidated restaurant level margins compressed into the 15% to 16% range as comparable sales decelerated during the last two quarters. BJ's Restaurants set a goal to elevated the margins up to the 19% to 20% range; however, it expects the margins to remain in the 15% to 16% range in the first quarter as the company invests for the future. The company said it expects restaurant level cash flow margin to stay in the compressed range at approximately 16% is pressure persists on sales. 

For the fourth quarter, BJ's Restaurants reported a 77.7% year-over-year decline in adjusted earnings per share to six cents, which aligned with the Zacks consensus estimate. Revenues increased 8% year-over-year to $199.8 million, nearly in line with the Zacks consensus estimate of $200 million.

Must Read: Oversold Conditions For BJ's Restaurants (BJRI)

TheStreet Ratings team rates BJ'S RESTAURANTS INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate BJ'S RESTAURANTS INC (BJRI) 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, reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 4.2%. Since the same quarter one year prior, revenues slightly increased by 7.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • BJRI 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. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.48 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, BJ'S RESTAURANTS INC's return on equity is below that of both the industry average and the S&P 500.
  • The gross profit margin for BJ'S RESTAURANTS INC is rather low; currently it is at 16.27%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.93% significantly trails the industry average.
  • You can view the full analysis from the report here: BJRI Ratings Report