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NEW YORK (TheStreet) -- Park Electrochemical (PKE) has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate PARK ELECTROCHEMICAL CORP (PKE) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- PKE's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues rose by 12.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 36.52% is the gross profit margin for PARK ELECTROCHEMICAL CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.83% significantly outperformed against the industry average.
- Despite currently having a low debt-to-equity ratio of 0.50, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 9.35 is very high and demonstrates very strong liquidity.
- PKE has underperformed the S&P 500 Index, declining 6.24% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, PARK ELECTROCHEMICAL CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: PKE Ratings Report
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