Shareholders have faith in loss-making PAR Technology (NYSE:PAR) as stock climbs 9.7% in past week, taking five-year gain to 150%

When you buy a stock there is always a possibility that it could drop 100%. But when you pick a company that is really flourishing, you can make more than 100%. For example, the PAR Technology Corporation (NYSE:PAR) share price has soared 150% in the last half decade. Most would be very happy with that. It’s also good to see the share price up 12% over the last quarter. But this move may well have been assisted by the reasonably buoyant market (up 5.4% in 90 days).

After a strong gain in the past week, it’s worth seeing if longer term returns have been driven by improving fundamentals.

Check out our latest analysis for PAR Technology

Because PAR Technology made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually desire strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

For the last half decade, PAR Technology can boast revenue growth at a rate of 18% per year. That’s well above most pre-profit companies. Meanwhile, its share price performance certainly reflects the strong growth, given the share price grew at 20% per year, compound, during the period. So it seems likely that buyers have paid attention to the strong revenue growth. To our minds that makes PAR Technology worth investigating – it may have its best days ahead.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

This free interactive report on PAR Technology’s balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It’s good to see that PAR Technology has rewarded shareholders with a total shareholder return of 91% in the last twelve months. That gain is better than the annual TSR over five years, which is 20%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It’s always interesting to track share price performance over the longer term. But to understand PAR Technology better, we need to consider many other factors. Take risks, for example – PAR Technology has 2 warning signs we think you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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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.