Why Par Technology Corp is a LT Buy.

Hey Everyone,

I came across this company while reading a partnership letter of an asset management firm that allocates capital in various securities. Naturally, I was curious to learn more about it, and low and behold, it was severely undervalued with great underlying economics and management that has made decisions that have kept the company alive and is positioning itself for the future very well.

For background PAR started as a defense company and made its way into the food industry firstly offering hardware solutions, like POS items, and in the last seven years undergoing a rapid transformation into a more cloud based solutions within the food industry. The security is undervalued due to net losses in the last seven years, this is because of the rapid transformation of the company into a primary software solutions provider, which has included many acqustions to position the company to offer a unified experience from Point of sale, to payements, to commerce. Hence in recent years the company has under gone volitality from the market, yet is is important to not net loss has dramtically reduced from around 70 million in 2023 to just 5 million net loss in 24, this aligns with strong revenue growth, year over year. Management has proved that it can adapt with the moving times something that kills great companies like Kodak as a major example. (Or perhaps severely weaken their market share.) I am acknowledging that saying that profitability in the near future is speculation, but all trends point in that way. (I will attach a summary of financials below.)

The balance sheet is strong as well as assets fully outweigh liablities and the assets include the companies they acquired equating to the goodwill, and 200 million in cash as well.

They also have great business advantages, primarily the fact that companies face high switching costs once they integrate. This is more relevant than ever since PAR is offering unified experiences. This can somewhat be applied with pricing power as well.

The margin of safety is there, although it is rather hard to make predictions for growth, even conservatively, the margin of safety is quite large, i have bought at 44 a share.

Financials –