Agilysys (AGYS) AI Stock Analysis

313 Followers

Top Page

Agilysys

(NASDAQ:AGYS)

62Neutral

Agilysys shows strong financial performance and promising corporate developments, but technical indicators and valuation concerns weigh down the overall score. The company is well-positioned for growth, yet current market conditions and valuation metrics suggest caution.

Positive Factors

Acquisitions

The recent Book4Time acquisition and strong execution on margins have driven the outperformance of AGYS's results.

Market Opportunity

Agilysys has a visible path to reacceleration, a defensible moat in the AI era as a system of records and Verticals leader, and a good story with Marriott.

Revenue Growth

Agilysys is set up well to deliver over 25% organic subscription revenue growth on a multi-year basis while expanding EBITDA margins.

Negative Factors

Gross Margins

Gross margins are expected to decrease slightly as products revenue rebounds and the mix is a headwind to gross margin.

Investor Expectations

The setup ahead of the F1Q print is less favorable with elevated investor expectations after a significant move up in the company valuation during F1Q, and likely underwhelming guidance since it's early in a new fiscal year.

Sales Pressures

AGYS' revenue segments came in softer than expected due to ongoing POS sales pressures and project implementations getting delayed.

Agilysys (AGYS) vs. S&P 500 (SPY)

Market Cap

$1.94B

Dividend YieldN/A

Average Volume (3M)310.14K

Price to Earnings (P/E)87.7

Beta (1Y)0.88

Revenue Growth15.53%

EPS Growth-75.45%

CountryUS

Employees1,900

SectorTechnology

Sector Strength40

IndustrySoftware - Application

Share Statistics

EPS (TTM)0.79

Shares Outstanding27,963,987

10 Day Avg. Volume215,103

30 Day Avg. Volume310,139

Financial Highlights & Ratios

PEG Ratio0.05

Price to Book (P/B)N/A

Price to Sales (P/S)7.82

Price to Cash Flow (P/CF)25.40

P/FCF Ratio25.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$137.67

Price Target Upside98.51% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering4

Agilysys Business Overview & Revenue Model

Company DescriptionAgilysys, Inc., together with its subsidiaries, operates as a developer and marketer of hardware and software products and services to the hospitality industry in North America, Europe, the Asia-Pacific, and India. It offers point of sale, property management systems, inventory and procurement, payments, reservations management, and seat solutions to enhance guest experience. The company also provides technical software support, maintenance, and subscription services; and professional services. It offers its solutions for gaming, hotels, resorts and cruise, corporate foodservice management, restaurants, universities, stadium, and healthcare. The company was formerly known as Pioneer-Standard Electronics, Inc. and changed its name to Agilysys, Inc. in 2003. Agilysys, Inc. was founded in 1932 and is headquartered in Alpharetta, Georgia.

How the Company Makes MoneyAgilysys makes money primarily through the sale and licensing of its software solutions and services to hospitality businesses. The company's revenue model includes subscription fees for its cloud-based solutions, maintenance and support fees for on-premise software, and professional services fees for consulting and implementation. Additionally, Agilysys generates income from hardware sales related to its software solutions, which includes point of sale terminals and other related devices. The company also benefits from strategic partnerships and alliances with other technology providers and hospitality organizations, enhancing its market reach and revenue potential.

Agilysys Financial Statement Overview

Summary

Agilysys demonstrates strong revenue growth and operational efficiency with robust margins and a stable balance sheet. There is room for improvement in net profit margins to align with top industry peers.

Income Statement

Very Positive

Agilysys shows strong revenue growth with a 33% increase from 2023 to 2024 TTM. The gross profit margin is robust at 61.85%, indicating effective cost management. Net profit margin stands at 8.45%, showing profitability, although it is slightly below the industry top performers. EBIT margin at 8.85% and EBITDA margin at 10.79% indicate solid operational efficiency.

Balance Sheet

Very Positive

The company maintains a healthy balance sheet with a low debt-to-equity ratio of 0.09, indicating low leverage risk. The return on equity is strong at 8.67%, and the equity ratio is 57.85%, demonstrating a substantial equity base relative to assets. Overall, the balance sheet suggests financial stability.

Cash Flow

Positive

Agilysys exhibits a strong free cash flow growth rate of 37.86%. The operating cash flow to net income ratio is 2.60, indicating efficient cash generation from operations. The free cash flow to net income ratio is 2.48, underscoring strong cash flow relative to earnings.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
263.57M	237.46M	198.06M	162.64M	137.18M	160.76M
	Gross Profit
163.02M	144.26M	120.82M	101.53M	89.38M	80.95M
	EBIT
23.32M	15.75M	12.88M	9.08M	-18.23M	-9.66M
	EBITDA
32.03M	25.95M	19.28M	10.39M	-16.40M	-16.18M
	Net Income Common Stockholders
22.26M	86.19M	14.58M	6.48M	-21.00M	-34.07M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
65.53M	144.89M	112.84M	96.97M	99.18M	46.65M
	Total Assets
330.37M	350.43M	243.04M	214.16M	189.87M	154.56M
	Total Debt
311.00K	23.89M	16.74M	10.70M	13.63M	15.38M
	Net Debt
-65.22M	-121.00M	-96.10M	-86.27M	-85.55M	-31.27M
	Total Liabilities
131.45M	113.95M	98.27M	81.36M	74.54M	82.81M
	Stockholders Equity
198.92M	236.48M	144.77M	132.80M	115.33M	71.76M
Cash Flow		Free Cash Flow
55.23M	40.06M	27.23M	27.28M	27.02M	7.16M
	Operating Cash Flow
57.78M	48.19M	34.46M	28.48M	28.41M	10.57M
	Investing Cash Flow
-147.00M	-7.60M	-6.87M	-25.68M	-1.39M	-3.45M
	Financing Cash Flow
34.09M	-8.56M	-11.09M	-4.90M	25.32M	-1.12M

Agilysys Technical Analysis

Technical Analysis Sentiment

Negative

Last Price69.35

Price Trends

50DMA

80.36

Negative

100DMA

105.12

Negative

200DMA

106.24

Negative

Market Momentum

MACD

-3.01

Negative

RSI

35.87

Neutral

STOCH

18.29

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AGYS, the sentiment is Negative. The current price of 69.35 is below the 20-day moving average (MA) of 74.30, below the 50-day MA of 80.36, and below the 200-day MA of 106.24, indicating a bearish trend. The MACD of -3.01 indicates Negative momentum. The RSI at 35.87 is Neutral, neither overbought nor oversold. The STOCH value of 18.29 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AGYS.

Agilysys Risk Analysis

Agilysys disclosed 32 risk factors in its most recent earnings report. Agilysys reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Agilysys Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FORTY	71 Outperform	$1.34B	16.17	12.21%	1.05%	3.51%	18.34%
TDC	65 Neutral	$1.89B	16.92	85.07%	―	-4.53%	93.29%
FORM	63 Neutral	$1.86B	27.24	7.50%	―	15.16%	-15.16%
AGYS	62 Neutral	$1.94B	87.71	9.14%	―	15.53%	-75.45%
EVCM	61 Neutral	$1.76B	―	-5.21%	―	3.46%	7.88%
NATL	60 Neutral	$1.79B	20.10	33.46%	―	3.01%	―
Sector *	57 Neutral	$18.54B	9.84	-14.38%	2.71%	5.07%	-23.65%

* Technology Sector Average

Performance Comparison

AGYS

Agilysys

69.35

-14.17

-16.97%

FORM

Formfactor

24.37

-22.61

-48.13%

FORTY

Formula Systems

84.17

1.58

1.91%

TDC

Teradata

19.73

-18.48

-48.36%

EVCM

EverCommerce

9.51

0.23

2.48%

NATL

NCR Atleos, LLC

24.47

4.57

22.96%

Agilysys Earnings Call Summary

Earnings Call Date: Jan 21, 2025 | % Change Since: -44.92% | Next Earnings Date: May 20, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with strong growth in PMS and subscription revenues, but significant challenges in POS sales and international markets. The record revenue and high sales pipeline are promising, yet the setbacks in POS and international sales temper the optimism.

Highlights

Record Revenue and Growth in PMS Segment

Fiscal 2025 Q3 revenue was a record $69.6 million, marking the 12th consecutive record revenue quarter, up 14.9% from the previous year's quarter. PMS sales were 70% higher than the prior year quarter, and fiscal 2025 is already the best year for PMS sales, ahead of the previous best full year by 33%.

Strong Recurring and Subscription Revenue

Recurring revenue was a record $44.4 million, up 26.4% from the prior year. Subscription revenue grew 45.1% year-over-year, making up 63.8% of total recurring revenue.

Increased New Customer Acquisitions

Fiscal 2025 Q3 saw the addition of 12 new customers, 11 of whom were fully subscription-based, with an average of 6 products purchased per customer, a record high.

High Sales Pipeline

The sales pipeline at the demonstration stage was at a record level, 20% higher than the previous year, with PMS and POS opportunities up 37% and 22%, respectively.

Lowlights

Challenges in POS Sales

POS sales fell short of expectations, especially in the Managed Food Services vertical. Product revenue was down 15.8% year-over-year, impacted by a decrease in POS sales.

International Sales Performance

Sales in the APAC and EMEA regions remained disappointing, with a continued dependence on significant deals rather than consistent smaller opportunities.

Service Revenue Challenges

Services revenue was below expectations due to the completion of significant development projects and customer delays during December, impacting the quarterly figures.

Company Guidance

During the Agilysys Q3 2025 earnings call, the company provided various performance metrics and insights into their financial guidance. Sales for the fiscal 2025 third quarter were the third highest ever, despite point-of-sale (POS) sales falling below expectations, particularly in the managed food services vertical. However, the company achieved its all-time best sales quarter for Property Management Systems (PMS), with sales excluding Book4Time being 70% higher than the same quarter the previous year. Overall, fiscal 2025 is already a record sales year for PMS and related modules, with sales up 33% compared to the previous best year. Revenue for Q3 reached a record $69.6 million, marking the 12th consecutive record revenue quarter, a 14.9% increase from the previous year. Recurring revenue was also at a record $44.4 million, growing by 26.4%, with subscription revenue making up 63.8% of the total. Despite challenges, the company expects POS sales to normalize in the coming quarters and maintains strong sales momentum moving forward. Agilysys anticipates full fiscal year revenue to reach $273 million, with a focus on profitability and subscription revenue growth.

Agilysys Corporate Events

M&A TransactionsBusiness Operations and Strategy

Agilysys Acquires Book4Time, Expands Spa Software Reach

Positive

Jan 28, 2025

Agilysys has closed a strategic acquisition of Book4Time for $150 million in cash, enhancing its customer base by over 30% and expanding its market leadership in spa software solutions. This acquisition strengthens Agilysys’ competitive position, allowing for greater product penetration within large global brands, and highlights the company’s ongoing revenue growth and strategic focus on hospitality software solutions.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.