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"We rate PERCEPTRON INC (PRCP) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. 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 expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- PRCP 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 3.09, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has increased to $1.65 million or 13.75% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -23.73%.
- 43.93% is the gross profit margin for PERCEPTRON INC which we consider to be strong. Regardless of PRCP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.41% trails the industry average.
- PERCEPTRON INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, PERCEPTRON INC reported lower earnings of $0.24 versus $0.72 in the prior year. This year, the market expects an improvement in earnings ($0.35 versus $0.24).
- PRCP, with its decline in revenue, underperformed when compared the industry average of 6.0%. Since the same quarter one year prior, revenues fell by 16.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: PRCP Ratings Report