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PAR Technology: What The Market Is Getting Wrong

Dec. 03, 2021 6:48 PM ETPAR Technology Corporation (PAR)26 Comments
Adrien Chevrier profile picture
Adrien Chevrier


  • PAR's value is obscured by a complicated story and a small market cap.
  • PAR includes some of its D&A expense in its cost of sales, making it harder for investors to see the margin expansion due to software.
  • PAR still has many products in its pipeline (payments, order management, analytics) that could lead to accelerating growth.
  • TAM is still underpenetrated, with virtually no international software business.
  • The terminal value of the business is underappreciated and could be a significant driver of a price increase.

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Smiling African waitress using a restaurant point of sale terminal

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This article was written by

Adrien Chevrier profile picture
Second year undergrad student beginning my investing journey. Sharing some of my thoughts. Feedback is more than welcomed, still new to the game.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of PAR either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (26)

Dave Schneider profile picture
Would their cut of payment processing be threatened by "defi"?
Any comments on todays results.
rgtichy profile picture
I am confused; you brought up OLO when discussing valuation and call it a peer but then you leave it out when discussing competition and opportunity in the 700,000 QSR + Fast-Casual market. Based on reading on OLO it looks like they have 75,000+ locations and growing at 25%+ ?

What am I not understanding?
Adrien Chevrier profile picture
@rgtichy OLO is the only other enterprise restaurant software company that is public. Although, Par is focused on POS services and OLO on delivery management, I think OLO gives an idea of what a mature Par could trade at. Par just began competing with OLO in Q1 2022 with the launch of its own digital order management platform. OLO is farther a long its development but its TAM is much smaller as they only cover a small portion of the software needs of enterprise restaurants. Par is punching above its weight which is why metrics look so bad, but if Savneet is able to pull off creating the first real enterprise restaurant software platform the terminal economics would be incredible. If they can't execute that then they can refocus on their core businesses and optimize margins and FCF and divest their defense biz. I have no doubt an activist or a strategic acquirer will make the aforementioned happen (if management does not). Asymmetric opportunity.
Out_on_a_limb profile picture
@Adrien Chevrier, aren't you forgetting TOST? FOUR is involved also.
Adrien Chevrier profile picture
@Out_on_a_limb Not enterprise, they serve mom-and-pop restaurants with a small number of locations. Ur right about FOUR but they are not in restaurants space per-say.
looks very interesting indeed after the sell off. Wise is also beaten up & eating up market share
Adrien Chevrier profile picture
@henry133 Just announced payments deal with +1,000 chain. Margins will be looking up. What will drive the stock this year (besides macro) is the traction of Par's new initiatives. If the market realizes that all this capex spend was well allocated then things should look up!
Millennial_Tyler profile picture
if $PAR 's biggest competition is $NCR then they don't have any competition.
Millennial_Tyler profile picture
@Adrien Chevrier Those earnings today from $NCR may point to some upside for PAR. Not at all surprised. The restaurants have to use something, but the bear case is that the increase in staffing wages may be slowing down the industry spend a bit at least temporally.
This plays right into Savneet's thesis:


Now they have to get a few like this one.
Adrien Chevrier profile picture
@emacd software will continue eating the world, current market environment does not change that. Par has isn't in the overcrowded part of the s/w market and is cheap.
I really like the CEO and his vision of building a software platform for the restaurat business that will produce a lot of cash flow that will allow him to deploy to make new acquisitions that will increase the wheel every year.
Listen to the podcast Invest Like the Best, he was trying to building the Berkshire of software buy acquiring small and sticky software businesses. Now he will do the same at PAR but now he has access to a lot of capital to implement his vision.
He did a good job turning around the company, making good acquisitions and changing the company culture. Next he just has to buy more software companies like Punchh and glue them together into a PaaS.
Adrien Chevrier profile picture
@Rocapitalist Looking back on Savneet's three years, what he accomplished is simply incredible! I think we are at juncture where this is no longer a turnaround story and more of a platform building story. What is holding back the stock imo is that we still haven't seen enough proof of the success of the platform. However, this will change in 2022 with the performance of Par's two new modules (payments and order management) and possibly an acquisition.
There is intense competition in this segment. They are only focused on restaurants as well. What am I missing here? also sky high valuation.
Adrien Chevrier profile picture
@hsheikh Not as much competition as one might think in the enterprise segment. Question now is will those large chains leave the incumbents for Par's ecosystem.
WallStPirate profile picture
What do you think they can get for the gov division
Adrien Chevrier profile picture
@WallStPirate No expert on the space but a conservative $100 million seems fair. Waiting for Q4 to see rev impact of new contract and more contracts in the works, could make gov biz more valuable.
Very long par. If they can execute this is a punchcard multiyear holding with multiples of upside from here.
Adrien Chevrier profile picture
@emacd 2022 is going to be the first see we see what a 100% focused Par looks like
@Adrien Chevrier so far your thesis has not played out in share price yet. But has this decline now made you feel even more confident in buying? Or has the thesis changed at all? Really looking to find a good moonshot to add to my conservative portfolio. Par is at the top of my list.
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