Agilysys (AGYS) Stock Forecast & Price Target

Agilysys Inc's strong financial performance in the second quarter has led management to raise full-year revenue guidance for FY26, projecting a range of $315 to $318 million, representing approximately 15% year-over-year growth at the midpoint. Notably, subscription revenue, which constitutes 65.5% of recurring revenue, surged by 33.1% year-over-year, prompting an increase in growth expectations to 29%, indicating strong demand for its software solutions. The company's comprehensive portfolio of hospitality technology, including POS systems and property management software, positions Agilysys for significant growth in the coming years, supported by anticipated higher-margin subscription revenue expansion.

Agilysys Inc. has provided a mixed outlook for fiscal year 2026, indicating softer-than-expected revenue projections influenced by a challenging macroeconomic environment, despite slightly higher EBITDA forecasts. Gross margins declined to 61.7%, falling short of estimates and decreasing year-over-year, primarily due to increased staffing in the professional services segment, which raises concerns about profitability. The company's ability to deliver products and services may be jeopardized by potential disruptions or changes in agreements, while a prolonged economic downturn could further suppress investment in the hospitality sector and negatively impact revenue growth.