PAR Technology (NYSE:PAR) has suffered bruising losses so far in 2026, with shares now down close to 70 percent since this time last year. The business provides software solutions for restaurants that bring together front of house, back of house, inventory management, scheduling, POS and other essential hospitality functions. With the severe decline in share prices, PAR is increasingly being viewed as undervalued. Can the stock bounce back, and how high will PAR technology go if and when it does begin to recover?
Why Is PAR Down So Dramatically?
The main driver of PAR’s losses has been the ongoing rout of SaaS stocks amid concerns that AI will disrupt traditional software platforms. In the first week of February, these concerns caused SaaS stocks to shed a total of around $1 trillion in market cap, and most are still depressed. Although it still remains to be seen whether or not these fears will prove to be accurate, the market’s nervousness on traditional software businesses has sent PAR and many of its peers drastically lower.
In addition to the direct effect of AI, PAR is also facing significantly higher hardware costs as a result of memory and processor shortages associated with rapid data center construction. This pressure has negatively impacted PAR’s hardware margins and has been made even worse by the costs added by tariffs.
It’s also worth mentioning that PAR Technology faces competitive pressures, especially from Olo. Several parts of PAR’s platform also overlap with services provided by the much larger restaurant technology business Toast (NYSE:TOST). With such a competitive landscape, it’s difficult to say that PAR has a strong and defensible moat. Even so, PAR has been executing well on plans of aggressive expansion, potentially making it an underappreciated player in the restaurant technology game.
PAR’s Top Line Popped 30% To Almost Half a Billion
Despite some real concerns, PAR demonstrated fairly positive performance in 2025. Revenues for the full year rose by 30.2 percent to $455.5 million, with subscription service gross margin exceeding 54 percent. In Q4, annual recurring revenue rose 16 percent on a year-over-year basis to $315.4 million. In management’s commentary, it was noted that the second half of 2024 saw far more ARR expansion than at any other time in PAR’s history.
Although PAR still isn’t generating profits on a GAAP basis, Q4 did mark the third consecutive quarter in which it posted positive non-GAAP earnings. Adjusted net income hit $2.6 million for the quarter, with adjusted EBITDA hitting $7.0 million. Q4’s GAAP net loss from continuing operations was ($20.9) million.
It’s worth noting that PAR has made significant investments of its own in AI, using it to directly power two separate AI assistants on its platform. Drawing on PAR’s large restaurant datasets, these AI tools can help customers improve operations, more easily retrieve information and increase both guest engagement and average ticket value. Management has described PAR’s strategy as one of becoming a go-to AI solution for a restaurant industry it views as an ideal candidate for AI adoption.
Even with these positive results, though, PAR did have a few struggles in 2026. As mentioned above, external pressures beyond the business’s control severely impacted hardware margins. PAR also burned a meaningful amount of cash in 2025, with its cash and cash equivalents falling from about about $108 million at the end of 2024 to about $80 million at the end of 2025. It’s worth noting, however, that much of this reduction in cash was offset by a large increase in accounts receivable.
Has PAR Technologies Become Severely Undervalued?
At 1.7 times sales and 1.0 times book value, it isn’t unfair to say that PAR Technology is trading at a very modest valuation for a software business. Analysts project a consensus target price of $36.67 for PAR shares, suggesting an upside of almost 88 percent from the most recent price of $19.52. PAR’s analyst ratings also lean strongly toward buy, with eight of the nine analysts covering it issuing buy ratings and the remaining one issuing a hold.
Another indicator that PAR Technology may have become substantially undervalued is the fact that its shares have sold off so dramatically while its margins and profitability have been improving. Adjusted net income per share turned positive at $0.15 in 2025, compared to an adjusted loss of ($0.73) in 2024. GAAP net loss last year totaled ($2.09) per share, but this was still a considerable improvement on 2024’s loss of ($2.63) per share.
So, How High Could PAR Go?
Given that PAR is largely selling off on market sentiment while still delivering reasonably strong revenue growth, it seems probable that the stock could bounce back as the year progresses. Even if PAR shares only regained the ground they’ve lost since the beginning of 2026, they would rebound toward $35 and produce over 45 percent worth of upside. It’s also worth noting that PAR has intermittently commanded P/S ratios ranging from 3-6 over the past few years, leaving room for even more upside if the stock regains its former value premiums.
This scenario, of course, assumes that the current selloff of SaaS stocks proves to be overblown, a view that is becoming common among financial experts. If AI does fundamentally disrupt the software industry, however, PAR and other SaaS businesses could be in for rough times and extended losses ahead. The odds, though, seem to fall more in favor of a gradual SaaS recovery unless the industry experiences worst-case scenario AI disruptions.
Ultimately, PAR could be set for a significant rebound as the market’s fears about AI disruption ease and a more measured evaluation of SaaS stocks sets in. While it’s difficult to say exactly how large this rebound could be in light of current market sentiment, it seems reasonable to suppose that PAR shares could move upward by 25 percent or more if the business can maintain its revenue growth momentum. Even then, the stock would still be well below both where it started this year and what analysts expect from it.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.