Park Electrochemical Corp. Stock Downgraded (PKE)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- Park Electrochemical (NYSE: PKE) 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 and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and relatively poor performance when compared with the S&P 500 during the past year.

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Highlights from the ratings report include:
  • PKE's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 15.91, which clearly demonstrates the ability to cover short-term cash needs.
  • Net operating cash flow has significantly increased by 167.60% to $6.37 million when compared to the same quarter last year. In addition, PARK ELECTROCHEMICAL CORP has also vastly surpassed the industry average cash flow growth rate of -0.53%.
  • PARK ELECTROCHEMICAL CORP reported flat earnings per share in the most recent quarter. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, PARK ELECTROCHEMICAL CORP reported lower earnings of $0.83 versus $1.13 in the prior year. This year, the market expects an improvement in earnings ($1.12 versus $0.83).
  • 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 0.1% when compared to the same quarter one year ago, dropping from $4.93 million to $4.93 million.
  • 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.

Park Electrochemical Corp., through its subsidiaries, develops, manufactures, markets, and sells high-technology digital and radio frequency/microwave printed circuit material products primarily for the telecommunications, and Internet infrastructure and high-end computing markets worldwide. Park Electrochemical has a market cap of $555.3 million and is part of the technology sector and electronics industry. Shares are up 8.5% year to date as of the close of trading on Thursday.

You can view the full Park Electrochemical Ratings Report or get investment ideas from our investment research center.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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