PAR Technology has gotten torched over the last six months - since March 2025, its stock price has dropped 35.8% to $40 per share. This was partly due to its softer quarterly results and might have investors contemplating their next move.

Is there a buying opportunity in PAR Technology, or does it present a risk to your portfolio? Get the full stock story straight from our expert analysts, it’s free.

Why Is PAR Technology Not Exciting?

Despite the more favorable entry price, we don't have much confidence in PAR Technology. Here are three reasons we avoid PAR and a stock we'd rather own.

1. Cash Burn Ignites Concerns

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

PAR Technology’s demanding reinvestments have drained its resources over the last five years, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 13.2%, meaning it lit $13.17 of cash on fire for every $100 in revenue.

2. Previous Growth Initiatives Have Lost Money

Growth gives us insight into a company’s long-term potential, but how capital-efficient was that growth? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

PAR Technology’s five-year average ROIC was negative 9.4%, meaning management lost money while trying to expand the business. Its returns were among the worst in the business services sector.

3. Short Cash Runway Exposes Shareholders to Potential Dilution

As long-term investors, the risk we care about most is the permanent loss of capital, which can happen when a company goes bankrupt or raises money from a disadvantaged position. This is separate from short-term stock price volatility, something we are much less bothered by.

PAR Technology burned through $18.9 million of cash over the last year, and its $400.3 million of debt exceeds the $85.69 million of cash on its balance sheet. This is a deal breaker for us because indebted loss-making companies spell trouble.

Unless the PAR Technology’s fundamentals change quickly, it might find itself in a position where it must raise capital from investors to continue operating. Whether that would be favorable is unclear because dilution is a headwind for shareholder returns.

We remain cautious of PAR Technology until it generates consistent free cash flow or any of its announced financing plans materialize on its balance sheet.

Final Judgment

PAR Technology isn’t a terrible business, but it doesn’t pass our bar. After the recent drawdown, the stock trades at 105.7× forward P/E (or $40 per share). Beauty is in the eye of the beholder, but our analysis shows the upside isn’t great compared to the potential downside. We're pretty confident there are superior stocks to buy right now. Let us point you toward the most dominant software business in the world.

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