Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model NEW YORK ( TheStreet) -- Perceptron (Nasdaq: PRCP) 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, reasonable valuation levels and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and a generally disappointing performance in the stock itself.
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- PRCP 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 this, the company maintains a quick ratio of 3.05, which clearly demonstrates the ability to cover short-term cash needs.
- PERCEPTRON 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, PERCEPTRON INC increased its bottom line by earning $0.34 versus $0.20 in the prior year. This year, the market expects an improvement in earnings ($0.37 versus $0.34).
- 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 580.7% when compared to the same quarter one year ago, falling from $0.55 million to -$2.62 million.
- The gross profit margin for PERCEPTRON INC is currently lower than what is desirable, coming in at 32.20%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -20.40% is significantly below that of the industry average.
-- Written by a member of TheStreet Ratings Staff