NEW YORK ( TheStreet) -- Planar Systems (Nasdaq: PLNR) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, unimpressive growth in net income, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself. Highlights from the ratings report include:
- PLANAR SYSTEMS INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, PLANAR SYSTEMS INC reported poor results of -$0.27 versus -$0.19 in the prior year. For the next year, the market is expecting a contraction of 11.1% in earnings (-$0.30 versus -$0.27).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 1593.7% when compared to the same quarter one year ago, falling from $0.13 million to -$1.90 million.
- The gross profit margin for PLANAR SYSTEMS INC is currently lower than what is desirable, coming in at 29.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -4.20% trails that of the industry average.
- Net operating cash flow has significantly decreased to -$3.80 million or 535.01% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of PLANAR SYSTEMS INC has not done very well: it is down 5.21% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.