Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. The Computer Software & Services industry as a whole closed the day down 0.5% versus the S&P 500, which was down 0.1%. Laggards within the Computer Software & Services industry included CounterPath ( CPAH), down 4.6%, TigerLogic ( TIGR), down 6.2%, Kingtone Wirelessinfo Solution ( KONE), down 2.2%, Sonic Foundry ( SOFO), down 1.6% and PAR Technology ( PAR), down 2.2%. TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today: PAR Technology ( PAR) is one of the companies that pushed the Computer Software & Services industry lower today. PAR Technology was down $0.10 (2.2%) to $4.40 on heavy volume. Throughout the day, 51,563 shares of PAR Technology exchanged hands as compared to its average daily volume of 14,400 shares. The stock ranged in price between $4.38-$4.53 after having opened the day at $4.47 as compared to the previous trading day's close of $4.50. PAR Technology Corporation, through its subsidiaries, primarily provides technology solutions to businesses and organizations in the hospitality industry worldwide. The company operates in two segments: Hospitality and Government. PAR Technology has a market cap of $71.5 million and is part of the technology sector. Shares are down 17.4% year-to-date as of the close of trading on Tuesday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. TheStreet Ratings rates PAR Technology as a hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, solid stock price performance and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and feeble growth in the company's earnings per share. Highlights from TheStreet Ratings analysis on PAR go as follows:
- PAR's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.01, which illustrates the ability to avoid short-term cash problems.
- PAR, with its decline in revenue, underperformed when compared the industry average of 6.1%. Since the same quarter one year prior, revenues fell by 15.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The gross profit margin for PAR TECHNOLOGY CORP is rather low; currently it is at 21.25%. Regardless of PAR's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -1.74% trails the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income has significantly decreased by 157.6% when compared to the same quarter one year ago, falling from -$0.38 million to -$0.99 million.
- The revenue growth greatly exceeded the industry average of 6.7%. Since the same quarter one year prior, revenues rose by 38.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, our view is that this company's fundamentals will not have much impact in either direction, allowing the stock to generally move up or down based on the push and pull of the broad market.
- Despite currently having a low debt-to-equity ratio of 0.44, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.89 is weak.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 3125.9% when compared to the same quarter one year ago, falling from -$0.03 million to -$0.87 million.
- 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 Software industry and the overall market, SONIC FOUNDRY INC's return on equity significantly trails that of both the industry average and the S&P 500.