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, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
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- 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 20.14, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has increased to $9.71 million or 39.77% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -7.59%.
- 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 ($0.99 versus $0.83).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength 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.
- The gross profit margin for PARK ELECTROCHEMICAL CORP is currently lower than what is desirable, coming in at 30.37%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 11.89% is above that of the industry average.