Agilysys (AGYS) Stock Forecast & Price Target

Agilysys Inc has demonstrated strong financial performance, prompting management to raise its revenue guidance for FY26 to between $315 million and $318 million, reflecting an expected year-over-year growth of approximately 15%. The company noted a significant increase in subscription revenue, which accounted for 65.5% of recurring revenue and surged 33.1% year-over-year, allowing for an upward revision of growth expectations to 29%. Additionally, Agilysys reported free cash flow of $15 million for the quarter, a substantial increase from $5.9 million in the prior year, highlighting the company’s robust operational efficiency and financial health.

Agilysys Inc. has reported gross margins of 61.7%, which fell 140 basis points short of estimates and saw a year-over-year decrease of 150 basis points, primarily due to an increase in the professional services team. Additionally, while EBITDA margins exceeded estimates at 20.6%, the overall outlook is clouded by potential disruptions related to merger and acquisition activities, which could adversely affect revenue and profitability. The company’s significant exposure to the hospitality industry raises concerns, as prolonged economic downturns or recessions could severely pressure investment spending and hinder revenue growth, further complicated by geopolitical instability and unforeseen regulations.