Par Technology (PAR) – “Uncovering the Crown Jewels”

Company:         PAR Technology (PAR)
Sector:                Technology – Application Software
Price/Market Cap:                        $26.30/$458M
Target Price/Implied Upside:     $41/55%

Thesis

PAR Technology Corp. (PAR) is an underappreciated, cloud-based, Point-of-Sale (POS) software provider anchored by its legacy as a government contractor.  New leadership has redirected the company to be laser focused on their future in the cloud.  The Balance Sheet has been recapitalized with a $80M convertible debt raise.  Proceeds will be used to accelerate the growth of their cloud based recurring revenue, and solidify their market position through bolt-on acquisitions. Growth of SaaS recurring revenue will improve margin and profitability profile and force a multiple revaluation. The Government business will continue to be a source of cashflow until the company finds an attractive buyer leaving the company as a pure-play, cloud-based restaurant and hospitality solution. Longer-term, the real growth opportunity may be in their nascent merchant services business launching in 2H 2019.