On Tuesday, Craig-Hallum maintained a Buy rating on PAR Technology (NYSE:PAR) while increasing the price target to $65 from $55.
"A few weeks ago, management made it clear to investors that M&A was imminent, and they certainly didn't disappoint us," said analysts at Craig-Hallum.
The firm highlighted recent strategic moves by PAR, pointing to the acquisitions of TASK and Stuzo as transformative steps for the company. These acquisitions are expected to significantly accelerate PAR's journey to profitability, with the company likely to achieve EBITDA positivity by the end of the year.
The acquisition of Stuzo, which has already been completed, is set to have an immediate impact on PAR's financials. Meanwhile, the TASK deal is anticipated to be finalized in Q3. The two acquisitions combined are projected to contribute $20 million to PAR's annual EBITDA, a figure that does not account for potential synergies or further growth, which Craig-Hallum suggests could be substantial.
InvestingPro Insights
As PAR Technology (NYSE:PAR) navigates through strategic acquisitions and aims for profitability, insights from InvestingPro provide a deeper look into the company's current financial landscape. With a market capitalization of $1.27 billion, PAR's journey is marked by significant volatility, as indicated by a price-to-earnings (P/E) ratio of -17.80. This volatility is also reflected in the stock's performance over the last month, with a price total return of -13.95%.
Despite these challenges, the company's strategic moves, such as the acquisitions of TASK and Stuzo, could be game-changers. The two acquisitions are expected to contribute significantly to PAR's EBITDA, which is a positive sign given that the company's gross profit margin over the last twelve months stood at 23.64%. However, an InvestingPro Tip suggests that analysts are not anticipating PAR to be profitable this year, which could be a point of concern for investors.
For those interested in further analysis, there are additional InvestingPro Tips available that could shed more light on PAR's financial health and future prospects. With the use of the coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a wealth of financial data and expert insights.
It is also worth noting that PAR Technology's liquid assets exceed its short-term obligations, which is a reassuring sign of the company's ability to meet its immediate liabilities. This could be particularly important as the company continues to integrate its recent acquisitions and strives for EBITDA positivity by year's end.
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