The latest analyst coverage could presage a bad day for PAR Technology Corporation (NYSE:PAR), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. Surprisingly the share price has been buoyant, rising 13% to US$50.79 in the past 7 days. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.
Following the latest downgrade, the current consensus, from the nine analysts covering PAR Technology, is for revenues of US$355m in 2024, which would reflect a not inconsiderable 17% reduction in PAR Technology's sales over the past 12 months. Losses are presumed to reduce, shrinking 19% per share from last year to US$1.63. However, before this estimates update, the consensus had been expecting revenues of US$406m and US$1.79 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also reducing the estimated losses the business will incur.
The consensus price target rose 8.2% to US$62.38, with the analysts increasingly optimistic about shrinking losses, despite the expected decline in sales.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 31% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 18% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.4% per year. It's pretty clear that PAR Technology's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that PAR Technology's revenues are expected to grow slower than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of PAR Technology going forwards.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for PAR Technology going out to 2026, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
