NEW YORK ( TheStreet) -- PAR Technology Corp (NYSE: PAR) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- PAR TECHNOLOGY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, PAR TECHNOLOGY CORP turned its bottom line around by earning $0.22 versus -$0.34 in the prior year. This year, the market expects an improvement in earnings ($0.25 versus $0.22).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 123.4% when compared to the same quarter one year prior, rising from $0.54 million to $1.20 million.
- PAR's debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.92 is somewhat weak and could be cause for future problems.
- The gross profit margin for PAR TECHNOLOGY CORP is currently lower than what is desirable, coming in at 25.10%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 2.00% is above that of the industry average.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, PAR TECHNOLOGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.