In a report released today, Mayank Tandon from Needham reiterated a Buy rating on Agilysys, with a price target of $130.00.
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Mayank Tandon has given his Buy rating due to a combination of factors including Agilysys’s strong performance in the first quarter of fiscal year 2025. The company demonstrated impressive growth in subscription revenue, which increased significantly year-over-year, alongside robust professional services revenue. Despite a miss on EBITDA attributed to one-time expenses from their annual user conference, the management’s reaffirmation of their fiscal year 2026 revenue and EBITDA guidance, along with an increased outlook for subscription growth, supports a positive outlook.
Furthermore, Tandon highlights the strong sales momentum in Agilysys’s property management system (PMS) and point of sale (POS) segments, coupled with a record backlog at the end of the quarter, as indicators of continued growth potential. Although the stock experienced a decline following the EBITDA miss, Tandon views this as an attractive buying opportunity. He anticipates that as the backlog is converted and subscription growth accelerates, the company’s shares have the potential to re-rate positively, justifying the reiterated Buy rating and a target price of $130.
Tandon covers the Technology sector, focusing on stocks such as Agilysys, Exlservice Holdings, and Genpact. According to TipRanks, Tandon has an average return of -1.9% and a 42.37% success rate on recommended stocks.