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 downgraded by TheStreet Ratings from buy to hold. 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. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.
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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, underperformed when compared the industry average of 0.0%. 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.
- PARK ELECTROCHEMICAL CORP's earnings per share declined by 11.5% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, PARK ELECTROCHEMICAL CORP reported lower earnings of $1.13 versus $1.58 in the prior year. For the next year, the market is expecting a contraction of 6.2% in earnings ($1.06 versus $1.13).
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Electronic Equipment, Instruments & Components industry average. The net income has decreased by 12.4% when compared to the same quarter one year ago, dropping from $5.38 million to $4.71 million.
-- Written by a member of TheStreet Ratings Staff