A Fresh Look at Agilysys (AGYS) Valuation as Shares Gain 21% in Three Months

Agilysys (AGYS) has seen its stock climb around 21% over the past three months, catching the eye of investors interested in software companies. The company’s momentum reflects steady growth in both revenue and net income recently.

See our latest analysis for Agilysys.

Agilysys’s share price has surged 21% over the past three months, outpacing many of its software peers and signaling that investors are increasingly optimistic about its growth outlook. While short-term momentum is strong, its one-year total shareholder return of nearly 7% shows steady progress for long-term holders.

If you want to see what else is gaining traction in the software space, now is a great time to check out fast growing stocks with high insider ownership

But with shares now within 8% of analyst price targets and strong growth already reflected in recent gains, investors are left to wonder if more upside remains or if the market is already accounting for all of Agilysys’s future growth.

Most Popular Narrative: 7.5% Undervalued

With Agilysys’s fair value estimated at $140 and a recent close at $129.5, the leading narrative suggests that upside remains according to analyst projections, even after recent gains.

The company's focused and increasingly differentiated AI-driven enhancements (such as personalized upselling, dynamic pricing, and AI-powered guest engagement tools) are expected to meaningfully elevate product value, drive upsell opportunities, and improve operational efficiency, positively impacting both revenue growth and net margins.

Read the complete narrative.

How do bold expectations for rising profits and next-generation software expansion shape this fair value? Discover which data points analysts believe will push Agilysys to new heights. Miss these financial forecasts, and you might overlook the secret behind analyst optimism.

Result: Fair Value of $140 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks remain because heavy exposure to the hospitality sector and ongoing costs could pressure Agilysys’s margins if market conditions deteriorate.

Find out about the key risks to this Agilysys narrative.

Another View: High Earnings Multiple Signals Market Optimism

Looking through the lens of earnings multiples, Agilysys trades at a lofty 148.3 times earnings, much higher than both its peers’ average of 30.6 and the US Software industry average of 31.2. The fair ratio is 39.7. This suggests the stock price may be stretched and could face valuation risk if growth disappoints.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Agilysys Narrative

If you have a different take or want to dig into the details firsthand, you can shape your own perspective in just a few minutes. Do it your way

A great starting point for your Agilysys research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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