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) -- Park Electrochemical (NYSE: PKE) has been upgraded by TheStreet Ratings from hold to buy. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- PKE 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 15.99, which clearly demonstrates the ability to cover short-term cash needs.
- PKE, with its decline in revenue, slightly underperformed the industry average of 5.5%. Since the same quarter one year prior, revenues fell by 12.8%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The gross profit margin for PARK ELECTROCHEMICAL CORP is currently lower than what is desirable, coming in at 32.90%. Regardless of PKE's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PKE's net profit margin of 11.41% compares favorably to the industry average.
- Net operating cash flow has decreased to $6.95 million or 11.29% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- 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 Electronic Equipment, Instruments & Components industry and the overall market, PARK ELECTROCHEMICAL CORP's return on equity is below that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff