NEW YORK ( TheStreet) -- Planar Systems (Nasdaq: PLNR) has been upgraded by TheStreet Ratings from sell to hold. 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 notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- The revenue growth significantly trails the industry average of 45.2%. Since the same quarter one year prior, revenues slightly increased by 6.1%. 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.
- PLNR 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 the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.32, which illustrates the ability to avoid short-term cash problems.
- 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. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PLANAR SYSTEMS INC continued to lose money by earning -$0.24 versus -$0.27 in the prior year. This year, the market expects an improvement in earnings (-$0.13 versus -$0.24).
- 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 231.0% when compared to the same quarter one year ago, falling from $1.08 million to -$1.41 million.
- The gross profit margin for PLANAR SYSTEMS INC is currently lower than what is desirable, coming in at 25.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.80% trails that of the industry average.