Assessing Agilysys (AGYS) Valuation After A Sharp Multi‑Period Share Price Pullback

Recent performance context for Agilysys (AGYS)

Agilysys (AGYS) has shown mixed short-term performance, with a 0.2% gain over the past day, a 10.3% decline over the past week, and a 33.1% decline over the past month.

Over the past 3 months the stock has declined 42.7%, the year-to-date move reflects a 37.7% decline, and the past year total return reflects an 11.3% decline.

See our latest analysis for Agilysys.

With the share price at $71.97, Agilysys has seen pressure build over recent months, with weaker short term share price returns contributing to a softer 1 year total shareholder return, even though the 5 year total shareholder return remains positive.

If this recent pullback has you looking at alternatives in software and digital infrastructure, it could be a good moment to scan a dedicated list of 34 AI infrastructure stocks as potential candidates for further research.

With Agilysys reporting annual revenue of $310.6m and net income of $30.4m, together with a value score of 2 and a recent pullback in the share price, the key question is whether this represents a potential buying opportunity or if the market is already pricing in future growth.

Most Popular Narrative: 49.3% Undervalued

Agilysys' most followed narrative pegs fair value at $142 per share, almost double the last close of $71.97. This sets up a very optimistic long term story.

The analysts have a consensus price target of $130.4 for Agilysys based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $152.0, and the most bearish reporting a price target of just $120.0.

Read the complete narrative.

Want to see what kind of revenue ramp and margin lift would need to line up for that fair value? The narrative leans heavily on compounding earnings power, richer profitability and a premium future earnings multiple. Curious how those pieces fit together over the next few years?

Result: Fair Value of $142 (UNDERVALUED)

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

However, this optimistic setup still leans heavily on the hospitality sector staying healthy and on Agilysys holding its ground against larger cloud competitors with deeper pockets.

Find out about the key risks to this Agilysys narrative.

Another way to look at Agilysys' valuation

The narrative tags Agilysys as undervalued, yet the current P/E of 66.3x is well above the US Software average at 24.3x and the peer average at 35.6x, and almost double our fair ratio of 33.7x. That kind of gap can mean rich expectations. How comfortable are you with paying up for growth?

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

Next Steps

If this mix of optimism and caution leaves you unsure, review the underlying data yourself and act quickly to form your own view with 4 key rewards.

Looking for more investment ideas?

If you are reassessing Agilysys, do not stop here. Broaden your watchlist with a few focused stock ideas surfaced by the Simply Wall St screener.

• Spot potential value opportunities early by checking out our list of screener containing 23 high quality undiscovered gems that the market may not be paying enough attention to yet.
• Prioritise resilience by reviewing 78 resilient stocks with low risk scores that score well on our risk metrics and can help steady an otherwise volatile portfolio.
• Strengthen your core holdings by scanning companies in the solid balance sheet and fundamentals stocks screener (40 results) that pair financial stability with fundamental quality.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com