Par Technology (PAR) AI Stock Analysis

• Market Cap: $1.42B
• Dividend Yield: N/A
• Average Volume (3M): 926.94K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.67
• Revenue Growth: 4.90%
• EPS Growth: -820.72%
• Country: US
• Employees: 1,581
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.03
• Shares Outstanding: 40,581,078
• 10 Day Avg. Volume: 770,968
• 30 Day Avg. Volume: 926,941
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.20
• Enterprise Value/Revenue: 7.48
• Enterprise Value/Gross Profit: 16.68
• Enterprise Value/Ebitda: -51.64
• 1Y Price Target: $66.71
• Price Target Upside: 90.27% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 48 Neutral
• Price Target: $52.00 ▲(48.32% Upside)

PAR Technology's overall stock score reflects a challenging financial and technical environment. The most significant factor is the company's financial performance, which shows revenue growth but struggles with profitability and cash flow. Technical analysis indicates bearish momentum, further weighing on the score. Valuation metrics are unfavorable due to ongoing losses and lack of dividends. The earnings call provides some optimism with strong revenue growth, but challenges in profitability and business execution remain. Overall, the stock requires significant improvements in financial health and market sentiment to enhance its attractiveness.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust market demand and effective sales strategies, enhancing the company's competitive position and long-term prospects.

Subscription Services Expansion

The significant rise in subscription services revenue underscores a successful shift to recurring revenue models, providing stability and predictability in cash flows.

Annual Recurring Revenue Growth

The substantial increase in ARR reflects strong customer retention and the growing adoption of PAR's solutions, supporting sustained financial health and growth.

Negative Factors

Profitability Challenges

Ongoing net losses highlight operational inefficiencies and the need for cost management improvements to achieve profitability and enhance shareholder value.

Cash Flow Issues

Negative operating cash flow indicates liquidity challenges, potentially limiting the company's ability to invest in growth initiatives and manage financial obligations.

POS Business Delays

Delays in the POS business rollout can hinder revenue growth and market expansion efforts, affecting the company's competitive edge in the restaurant technology sector.

Par Technology Business Overview & Revenue Model

Company Description

PAR Technology Corporation, together with its subsidiaries, provides technology solutions to the restaurant and retail industries worldwide. The company operates in two segments, Restaurant/Retail and Government. The Restaurant/Retail segment offers point-of-sale (POS) technology solutions, including Brink POS, an open cloud solution that integrates with third party products and in-house systems; Punchh, an enterprise-grade customer loyalty and engagement solution for restaurant and convenience store brands; Data Central, a cloud software solution for back-office applications; PAR Payment Services, a merchant services offering; POS integrated solutions for wireless headsets for drive-thru order-taking; and the PAR Infinity, PAR Phase, PAR Helix, and the EverServ 8000 series platform. This segment also offers training, installation, technical support, and repair services. The Government segment provides intelligence, surveillance, and reconnaissance solutions; systems engineering support and software-based solutions; satellite and teleport facility operations and maintenance, engineering, and installation services; satellite control center; and information technology infrastructure library services to the Unites States Department of Defense and other federal agencies, as well as offers licensed software products. It offers products and services through its sales teams, channel partners, and resellers. The company was founded in 1968 and is headquartered in New Hartford, New York.

How the Company Makes Money

PAR Technology generates revenue through multiple channels, primarily by selling its point-of-sale systems and software solutions to the restaurant industry. This includes initial hardware sales, ongoing software subscriptions, and support services. The company also earns revenue through its Government segment by providing specialized technology solutions and contracts for defense and public safety entities. Key revenue streams include software-as-a-service (SaaS) subscriptions, which provide a steady income, along with installation and maintenance services. Strategic partnerships with major restaurant chains and technology providers further enhance PAR's market reach and contribute significantly to its earnings.

Par Technology Financial Statement Overview

Summary

Par Technology is experiencing growth in revenue but faces challenges in profitability and cash flow management. The company has shown some improvement in gross profit margins, yet negative net profit margins and EBIT margins highlight ongoing operational inefficiencies. The balance sheet reflects a moderate leverage position, but negative returns on equity indicate profitability concerns. Cash flow issues persist, with negative growth and coverage ratios. Overall, while there are positive signs of revenue growth, the company needs to focus on improving profitability and cash flow to enhance its financial health.

Income Statement

Par Technology shows a mixed performance in its income statement. The company has achieved a revenue growth rate of 8.93% in the TTM period, indicating a positive trend in sales. However, profitability remains a concern with negative net profit margins and EBIT margins, reflecting ongoing operational challenges. The gross profit margin has improved to 44.82% in the TTM, suggesting better cost management, but the overall negative margins highlight the need for further efficiency improvements.

Balance Sheet

The balance sheet of Par Technology presents a moderate financial position. The debt-to-equity ratio of 0.47 in the TTM indicates a manageable level of leverage, which is a positive sign. However, the return on equity remains negative, reflecting the company's struggle to generate returns for shareholders. The equity ratio stands at a healthy level, suggesting a stable asset base, but the negative ROE points to profitability issues that need addressing.

Cash Flow

Par Technology's cash flow statement reveals significant challenges. The free cash flow growth rate is negative, and the operating cash flow to net income ratio is also negative, indicating cash flow difficulties. Despite this, the free cash flow to net income ratio is positive, suggesting that the company is generating some cash relative to its net losses. Overall, the cash flow situation requires improvement to ensure financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	418.02M	349.98M	415.82M	262.35M	282.88M	213.79M
Gross Profit	187.37M	146.12M	98.31M	81.72M	62.12M	39.33M
EBITDA	-60.53M	-46.60M	-45.83M	-32.05M	-45.66M	-21.16M
Net Income	-86.28M	-4.99M	-69.75M	-69.32M	-75.80M	-36.56M
Balance Sheet
Total Assets	1.39B	1.38B	802.61M	854.86M	888.15M	343.75M
Cash, Cash Equivalents and Short-Term Investments	85.69M	108.64M	74.56M	110.62M	188.42M	180.69M
Total Debt	400.31M	376.66M	381.83M	393.37M	311.26M	109.17M
Total Liabilities	532.60M	509.02M	469.54M	479.66M	383.80M	155.34M
Stockholders Equity	859.14M	871.71M	333.06M	375.19M	504.35M	188.41M
Cash Flow
Free Cash Flow	-18.90M	-32.03M	-27.44M	-50.47M	-61.44M	-21.54M
Operating Cash Flow	-11.62M	-25.25M	-17.07M	-43.07M	-53.16M	-20.24M
Investing Cash Flow	-114.89M	-180.11M	-7.78M	-66.71M	-382.99M	-9.04M
Financing Cash Flow	98.44M	278.51M	-1.62M	-2.57M	443.61M	180.69M

Par Technology Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 35.06
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PAR, the sentiment is Negative. The current price of 35.06 is below the 20-day moving average (MA) of 38.21, below the 50-day MA of 44.41, and below the 200-day MA of 59.93, indicating a bearish trend. The MACD of -2.86 indicates Negative momentum. The RSI at 24.65 is Positive, neither overbought nor oversold. The STOCH value of 12.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PAR.

Par Technology Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AGYS	76 Outperform	$3.09B	222.29	5.21%	―	17.91%	-86.60%
GBTG	65 Neutral	$3.88B	―	-4.72%	―	3.61%	-44.99%
CALX	65 Neutral	$3.88B	―	-3.52%	―	-8.80%	-657.91%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
PAR	48 Neutral	$1.42B	―	-12.65%	―	4.90%	-820.72%
ASAN	46 Neutral	$3.29B	―	-80.55%	―	9.74%	22.36%