Greenhaven Road Capital, an investment management company, released its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the fund returned around -12% net of fees and expenses, trailing the Russell 2000 by approximately 2% in large part. The Q1 letter focused on President Trump’s Liberation Day and the attendant tariff policies rather than company fundamentals. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its first-quarter 2025 investor letter, Greenhaven Road Capital highlighted stocks such as PAR Technology Corporation (NYSE:PAR). PAR Technology Corporation (NYSE:PAR) offers omnichannel cloud-based hardware and software solutions to the restaurant and retail industries. The one-month return of PAR Technology Corporation (NYSE:PAR) was 11.65%, and its shares gained 38.49% of their value over the last 52 weeks. On May 22, 2025, PAR Technology Corporation (NYSE:PAR) stock closed at $66.39 per share with a market capitalization of $2.689 billion.
Greenhaven Road Capital stated the following regarding PAR Technology Corporation (NYSE:PAR) in its Q1 2025 investor letter:
“PAR Technology Corporation (NYSE:PAR) – PAR does have a legacy hardware business that would be impacted by tariffs. PAR’s supply chains primarily involve South Korea and Taiwan, so they should not be impacted by the super-sized China tariffs, and the company believes that tariff costs generally can be passed on to customers. That said, virtually nobody owns PAR for the hardware business, though it is helpful to be vertically integrated and subsidized hardware can be used to secure very high-margin software contracts. I cannot imagine an informed PAR investor selling their shares because of the impact of tariffs. Further, PAR’s core customers are Quick Service Restaurants (Burger King, etc.), which generally do very well in a weaker economy as consumers “trade down.”
PAR continues to execute and has expanded its relationship with Burger King to include its restaurant data analytics product, Delegat, which PAR purchased on December 31, 2024. The combination of new products, new features, new customers, cross-sell, up-sell, and price increases provide a sustained path to 20%+ revenue growth and much faster EBITDA growth because of operating leverage. Multiple compression is always possible, particularly during a “trade war,” but PAR is selling high-ROI, mission-critical software to resilient customers in a favorable competitive landscape. I still like our chances, even with 10% tariffs.
PAR is trading at sub-5X next year’s Annual Recurring Revenue (ARR). Yes, the multiple could compress, but PAR will likely become a “Rule of 40” company, a category that currently and historically trade at higher valuations. If PAR continues to achieve 20%+ organic growth and we layer in accretive acquisitions that provide cross-sell opportunities, I believe that the share price should march higher.”
An engineer working in a tech lab, surrounded by tools and components.
PAR Technology Corporation (NYSE:PAR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held PAR Technology Corporation (NYSE:PAR) at the end of the fourth quarter compared to 24 in the third quarter. PAR Technology Corporation’s (NYSE:PAR) first quarter revenue increased more than 48% to $104 million. While we acknowledge the potential of PAR Technology Corporation (NYSE:PAR) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In another article, we covered PAR Technology Corporation (NYSE:PAR) and shared Greenhaven Road Capital’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
