Agilysys (AGYS) Stock Forecast & Price Target

Agilysys Inc is poised for significant growth, with full-year revenue guidance for FY26 revised to $315 million to $318 million, representing a projected 15% year-over-year increase at the midpoint, driven chiefly by robust subscription and professional services revenue. Subscription revenue, which constitutes 65.5% of recurring revenue, experienced a notable increase of 33.1% year-over-year, leading the company to raise its subscription revenue growth expectations to 29%. The company's diverse portfolio of hospitality technology solutions, including POS systems and property management software, positions it well for sustained growth, particularly as newer products achieve higher attach rates and contribute to accelerated margin expansion.

Agilysys Inc's financial outlook for FY26 appears mixed, with revenue expectations softer than anticipated due to a challenging macroeconomic environment, despite slightly higher EBITDA guidance. Gross margins of 61.7% fell short of estimates and decreased year-over-year, primarily due to increased costs associated with a growing professional services team, while EBITDA margins exceeded expectations due to reduced general and administrative expenses. Additionally, the potential for disruptions from merger or acquisition activity, as well as economic downturns negatively impacting investment in the hospitality sector, raises concerns about Agilysys's ability to sustain revenue growth and profitability.