As you might know, PAR Technology Corporation (NYSE:PAR) recently reported its annual numbers. It was a pretty bad result overall; while revenues were in line with expectations at US$214m, statutory losses exploded to US$1.92 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from PAR Technology's five analysts is for revenues of US$248.2m in 2021, which would reflect a decent 16% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 45% to US$1.05. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$248.1m and losses of US$0.75 per share in 2021. While this year's revenue estimates held steady, there was also a massive increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
Although the analysts are now forecasting higher losses, the average price target rose 13% to US$83.75, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values PAR Technology at US$107 per share, while the most bearish prices it at US$75.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that PAR Technology is forecast to grow faster in the future than it has in the past, with revenues expected to display 16% annualised growth until the end of 2021. If achieved, this would be a much better result than the 4.3% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 7.3% per year. So it looks like PAR Technology is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for PAR Technology going out to 2023, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for PAR Technology that you should be aware of.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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