| Company | Aug 25 | Sep 25 | Oct 25 | Nov 25 | Dec 25 | Jan 26 | Feb 26 | Mar 26 | Apr 26 | May 26 | Jun 26 | Jul 26 | 12-Mo |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| AGYS | -4% | -4% | +19% | -2% | -3% | -27% | -17% | -1% | -10% | +35% | +21% | +1% | -8% |
| TYL | -4% | -7% | -9% | -1% | -3% | -19% | -4% | -3% | -0% | -8% | -7% | +6% | -47% |
| PAR | -16% | -23% | -11% | -2% | +5% | -28% | -37% | -19% | +1% | +15% | +13% | -3% | -72% |
| MANH | -2% | -5% | -11% | -3% | -2% | -13% | -10% | -2% | +4% | +9% | -7% | +37% | -13% |
| NCRRP | -1% | +0% | +0% | +0% | +1% | +0% | +1% | +0% | -7% | +0% | +1% | +0% | -4% |
| ROP | -4% | -5% | -10% | +0% | -0% | -16% | -6% | +1% | +1% | -8% | +4% | +16% | -28% |
Source: Yahoo Finance monthly adjusted close.
Quick Thesis
- Rated hold because valuation already discounts steady execution.
- Strongest support is net cash: $123.7M cash versus $18.4M debt.
- Main risk is valuation: 8.8x EV/Revenue and 70.6x trailing P/E.
- Peer comparison says the stock is rich versus most software peers.
- I would turn more constructive if quarterly revenue stays above $87.7M and operating margin moves toward the high teens.
Executive Summary
Rating: HOLD | AGYS
We’ll begin tracking this call’s performance since publication once sufficient adjusted-close data is available.
I would put my rating as a hold because Agilysys is still executing well, but the shares already price in a cleaner earnings path than the business has yet proven. The balance sheet is the clearest support: $123.7M of cash against $18.4M of debt leaves net cash and no refinancing pressure, while TTM free cash flow margin of 17.4% shows the model is still converting revenue into cash. The main tension is valuation, not solvency, because the stock trades at 8.8x EV/Revenue, 33.5x forward P/E, and only 1.9% FCF yield, so the market is paying for continued margin progress. I would raise my rating more toward a buy if quarterly revenue stays above $87.7M and operating margin moves toward the high teens, because that would show the current premium is being earned rather than assumed.
Company Profile
Agilysys provides hospitality software for hotels, resorts, casinos, and food-service operators. Its revenue mix is shifting toward subscriptions and maintenance, which is the right direction for a software business because recurring revenue is more durable than one-time product sales. The company also sells products and professional services, so implementation quality and customer retention matter as much as new bookings. In my view, the market opportunity is attractive, but the investment case depends on whether recurring software revenue can keep outgrowing the lower-quality parts of the mix.
Economic Moat
Business Model
Agilysys’ moat is built around embedded hospitality software, recurring subscriptions, and the switching costs that come with core property and venue systems. That is a real structural advantage in my view because once a hotel or casino runs operations through the platform, replacing it is disruptive and expensive. The company’s subscription and maintenance revenue rose to $205.9M in fiscal 2026 from $170.1M in fiscal 2025, which supports the idea that the installed base is deepening rather than churning away. I also think the move toward recurring revenue matters because it makes the business less dependent on one-off product cycles and more tied to customer retention.
Business & Operating Risks
The biggest disclosed risk is demand sensitivity to travel and hospitality spending, because a weaker economy or lower travel activity can delay, reduce, or cancel customer purchases and slow collections. That risk is not abstract: the company still serves a customer base that can pull back quickly when travel weakens, even though revenue reached $87.7M in the latest quarter. A second risk is technology execution, especially AI, cyber, privacy, and cloud dependence, since the filing warns that competitors could use AI to build lower-cost alternatives and that service disruptions or breaches could create legal and financial exposure. In my view, these risks do not yet break the moat, but they do threaten the pace at which Agilysys can monetize it.
Management Discussion & Analysis
Management appears to be responding to those risks by pushing the mix toward recurring revenue and by keeping the balance sheet flexible rather than stretched. Subscription and maintenance revenue rose to $205.9M in fiscal 2026, and operating income improved to $43M from $22.6M, so the strategy is showing up in the numbers. At the same time, product development rose to $72.7M and sales and marketing to $39.8M, which tells me management is still investing heavily to defend the platform and expand the customer base. The key point is that the company is addressing execution risk with investment, but the margin gains are not yet large enough for me to call the operating model fully mature.
Recent Events
The most important recent filings were the fiscal 2026 third-quarter earnings release on January 26, 2026, and the full-year release on May 18, 2026. Those disclosures do not suggest a strategic pivot; they reinforce that Agilysys is still executing on the same software and hospitality cadence, so the moat thesis remains tied to operating discipline rather than corporate restructuring. The investor presentation materials released on February 2, 2026, and June 3, 2026, show management is still actively marketing the equity story, which is sensible only if the earnings trend continues to support it. I do not see a recent event that weakens the moat, but I also do not see one that materially expands it.
Financial Analysis
Growth
AGYS — Financial Growth (Quarterly, USD Mil)
| Metric | 2025-06-30 | 2025-09-30 | 2025-12-31 | 2026-03-31 | 2026-06-30 |
|---|---|---|---|---|---|
| REVENUE (USD Mil) | 76.7 | 79.3 | 80.4 | 82.9 | 87.7 |
| EBIT (USD Mil) | 5.1 | 15.8 | 12.9 | 15.2 | 10.9 |
| EBITDA (USD Mil) | 7.6 | 18.3 | 15.5 | 17.7 | 13.3 |
| NET INCOME (USD Mil) | 4.9 | 11.7 | 9.9 | 12.3 | 9 |
| DILUTED EPS | 0.2 | 0.4 | 0.3 | 0.4 | 0.3 |
Source: Yahoo Finance — Quarterly Financial Statements
Revenue rose from $76.7M in Q2 2025 to $87.7M in Q2 2026, a 14.4% increase, and that keeps Agilysys in the upper half of the peer group on growth. EBITDA, however, slipped to $13.3M from $17.7M sequentially, while net income fell to $9M from $12.3M, so the latest quarter shows that top-line growth is still a little ahead of earnings conversion. I read that as a healthy but not yet fully efficient growth profile: the business is expanding, but it still needs margin discipline to turn revenue momentum into a stronger equity story.
Profitability
AGYS — Profitability (TTM)
| Metric | TTM |
|---|---|
| Operating Margin (TTM) | 11.1% |
| Net Margin (TTM) | 13.0% |
| Return on Assets (TTM) | 5.5% |
| Return on Equity (TTM) | 13.8% |
| Gross Margin (TTM) | 63.1% |
| EBITDA Margin (TTM) | 14.8% |
Source: Yahoo Finance — Trailing Twelve Months (TTM)
TTM gross margin of 63.1% is the cleanest sign that the software layer is working, and it is well above the level you would expect from a low-quality services business. The gap between gross margin and TTM EBITDA margin of 14.8% shows that operating expenses still absorb a large share of gross profit, which is why the company’s profitability is good rather than exceptional. TTM operating margin of 11.1% and net margin of 13.0% are both positive, and TTM return on equity of 13.8% versus return on assets of 5.5% tells me the business is generating acceptable returns without relying on aggressive leverage. That matters for the moat because the recurring model is finally producing real earnings, even if it is not yet at a mature software margin profile.
Valuation
AGYS — Valuation Multiples
| Metric | Value |
|---|---|
| Market Cap (USD Mil) | 3,028 |
| Enterprise Value (USD Mil) | 2,915 |
| Trailing P/E | 70.6 |
| Forward P/E | 33.5 |
| Price/Sales (TTM) | 9.2 |
| Price/Book (mrq) | 8.9 |
| EV/Revenue | 8.8 |
| EV/EBITDA | 59.8 |
| Beta (5Y Monthly) | 0.37 |
| FCF Yield % (TTM) | 1.9% |
| Forward EPS (USD) | 3.2 |
| Analyst Target Price – Low (USD) | 118 |
| Analyst Target Price – Mean (USD) | 134.5 |
| Analyst Target Price – High (USD) | 159 |
| # Analyst Opinions | 6 |
Source: Yahoo Finance
Agilysys trades at 8.8x EV/Revenue, 9.2x price to sales, 59.8x EV/EBITDA, and 70.6x trailing P/E, so the market is clearly paying for future earnings rather than current earnings. The 33.5x forward P/E and 1.9% FCF yield reinforce that point, and I think the valuation is demanding for a company that is still proving how much of its revenue growth can flow through to operating profit. On the analysis here, I would put fair value in a range of about $100-$120 per share, which sits below the $134.5 analyst mean and inside the broader $118-$159 analyst target range from six opinions. That tells me consensus is constructive, but my range is lower because I weight the still-modest 11.1% operating margin and 17.4% FCF margin more heavily than the market seems to. On EPS, I would frame a reasonable range around $3.0-$3.5, which brackets the 3.2 forward EPS estimate and implies the stock is not cheap on a like-for-like earnings basis versus peers with stronger scale or lower multiples. The valuation justification that follows from the rating is the same: the balance sheet is clean, but the multiple already assumes the margin expansion still ahead of the company.
Leverage
AGYS — Leverage & Coverage (Quarterly)
| Metric | Value |
|---|---|
| Total Debt/Equity % (mrq) | 5.5 |
| Current Ratio (mrq) | 1.7 |
| Total Debt (mrq, USD Mil) | 18.4 |
| Operating Cash Flow (TTM, USD Mil) | 82.2 |
| Levered Free Cash Flow (TTM, USD Mil) | 57.5 |
| Net Debt/EBITDA (TTM) | -2.2 |
| FCF Margin % (TTM) | 17.4% |
Source: Yahoo Finance — Quarterly Financial Statements
Agilysys has 5.5% debt to equity, -2.2x net debt to EBITDA, and 17.4% FCF margin, so the balance sheet is net cash rather than net debt. TTM operating cash flow was $82.2M and levered free cash flow was $57.5M, which means the company is funding growth from internal cash generation, not from financial strain. Net debt to EBITDA of -2.2x and FCF margin of 17.4% both point to a flexible capital structure, and that is one reason I am not more negative on the stock despite the valuation. The leverage profile does not threaten the moat; if anything, it gives management room to keep investing while competitors with weaker balance sheets may have less flexibility.
Insider Activity
The insider record shown here is mixed, but I would not overread it as a thesis driver. The table shows open-market purchases by Melvin L. Keating, while the broader transaction record in the filing window points to more selling than buying overall, which suggests insider confidence is not broad-based. That is a mild negative, but it is secondary to the operating and valuation debate.
Comparable Analysis
Growth
| Company | Revenue TTM (USD Mil) | Revenue Growth YoY % | Diluted EPS TTM |
|---|---|---|---|
| AGYS | 330.3 | 14.3% | 1.5 |
| TYL | 2,429.7 | 8.2% | 7.5 |
| PAR | 496.7 | 18.7% | -1.8 |
| MANH | 1,126.2 | 9.3% | 3.5 |
| NCRRP | — | — | — |
| ROP | 8,280.3 | 8.5% | 24 |
Source: Yahoo Finance
Agilysys posted 14.3% TTM revenue growth, ahead of TYL at 8.2%, MANH at 9.3%, and ROP at 8.5%, while PAR was faster at 18.7%. That puts AGYS in the upper half of the group, but not at the top, so the stock’s premium only works if earnings growth keeps accelerating rather than merely holding steady. I also think the growth profile matters more here because the company’s margin structure still leaves room for operating leverage if revenue keeps compounding.
Valuation
| Company | Trailing P/E | Forward P/E | EV/Revenue | EV/EBITDA | Price/Sales (TTM) | Price/Book (mrq) | Market Cap (USD Mil) | Enterprise Value (USD Mil) | Beta (5Y Monthly) | FCF Yield % (TTM) | Forward EPS | Analyst Target Price – Low | Analyst Target Price – Mean | Analyst Target Price – High | # Analyst Opinions |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| AGYS | 70.6 | 33.5 | 8.8 | 59.8 | 9.2 | 8.9 | 3,028 | 2,915 | 0.37 | 1.9% | 3.2 | 118 | 134.5 | 159 | 6 |
| TYL | 41.7 | 20.7 | 5.6 | 29.4 | 5.4 | 4.3 | 13,008 | 13,493 | 0.81 | 4.6% | 15.4 | 335 | 426.6 | 525 | 22 |
| PAR | — | 12.5 | 2.2 | -38.3 | 1.5 | 0.9 | 741 | 1,094 | 1.31 | 1.3% | 1.4 | 18 | 25.3 | 33 | 8 |
| MANH | 55.8 | 31.5 | 9.9 | 38.4 | 10 | 71.3 | 11,231 | 11,099 | 0.93 | 2.9% | 6.1 | 180 | 207 | 240 | 11 |
| NCRRP | 857.1 | — | — | — | — | 197.9 | — | — | — | — | — | — | — | — | — |
| ROP | 16.5 | 16.3 | 6 | 15.5 | 4.7 | 2.1 | 39,089 | 50,043 | 0.74 | 5.8% | 24.3 | 335 | 440.3 | 550 | 15 |
Source: Yahoo Finance
AGYS screens expensive on every core multiple, with 8.8x EV/Revenue, 70.6x trailing P/E, 33.5x forward P/E, and 1.9% FCF yield. TYL is cheaper at 5.6x EV/Revenue and 4.6% FCF yield, ROP is 6.0x and 5.8%, while MANH is also rich at 9.9x and 2.9%; on that basis, AGYS sits closer to the expensive end of the peer set than the middle. Using the peer EV/Revenue range against AGYS’s $330.3M TTM revenue gives an implied enterprise value of roughly $726.7M to $3.3B, or about $22-$115 per share after netting cash and debt and dividing by shares outstanding. That range is wide, but the stock still looks expensive on a growth-adjusted basis because the market is already paying for a margin step-up that has not yet fully arrived.
Profitability
| Company | Operating Margin (TTM) | Net Margin (TTM) | Return on Assets (TTM) | Return on Equity (TTM) | Gross Margin (TTM) | EBITDA Margin (TTM) |
|---|---|---|---|---|---|---|
| AGYS | 11.1% | 13.0% | 5.5% | 13.8% | 63.1% | 14.8% |
| TYL | 14.7% | 13.4% | 4.2% | 9.7% | 47.2% | 18.9% |
| PAR | -5.5% | -14.5% | -2.1% | -8.6% | 43.0% | -5.8% |
| MANH | 25.0% | 18.7% | 24.4% | 96.4% | 55.8% | 25.7% |
| NCRRP | — | — | — | — | — | — |
| ROP | 27.7% | 30.2% | 4.2% | 13.1% | 69.5% | 39.1% |
Source: Yahoo Finance
AGYS’ 63.1% gross margin is stronger than TYL’s 47.2% and PAR’s 43.0%, which tells me the product economics are healthy. The company’s 14.8% EBITDA margin trails TYL at 18.9% and MANH at 25.7%, but it is far ahead of PAR’s negative margin, so AGYS sits in the middle of the pack on operating efficiency. ROE of 13.8% and ROA of 5.5% are respectable, and they compare well with TYL’s 9.7% and 4.2%, which supports the view that Agilysys is already a quality business even if it is not yet a top-tier margin compounder.
Leverage
| Company | Total Debt/Equity % (mrq) | Current Ratio (mrq) | Total Debt (mrq, USD Mil) | Operating Cash Flow TTM (USD Mil) | Free Cash Flow TTM (USD Mil) | Net Debt/EBITDA (TTM) | FCF Margin % (TTM) |
|---|---|---|---|---|---|---|---|
| AGYS | 5.5 | 1.7 | 18.4 | 82.2 | 57.5 | -2.2 | 17.4% |
| TYL | 47.9 | 1.6 | 1,455 | 730.8 | 594.4 | 1.1 | 24.5% |
| PAR | 53 | 2.2 | 431.5 | -12.8 | 9.8 | -12.4 | 2.0% |
| MANH | 34.2 | 1 | 53.9 | 414.9 | 321.1 | -0.5 | 28.5% |
| NCRRP | — | — | — | — | — | — | — |
| ROP | 60.5 | 0.6 | 11,319.4 | 2,669.1 | 2,265.7 | 3.4 | 27.4% |
Source: Yahoo Finance
AGYS has the cleanest balance sheet in the group, with 5.5% debt to equity, -2.2x net debt to EBITDA, and 17.4% FCF margin. TYL carries 47.9% debt to equity and 1.1x net debt to EBITDA, ROP has 60.5% and 3.4x, while MANH is also net cash at -0.5x but with a much larger absolute debt base. In my view, AGYS deserves some valuation support for that balance-sheet strength, but not enough to erase the premium entirely because the market is still asking for faster earnings conversion than the peer set is currently showing.
Conclusion
I would put my rating as a hold because the core tension is now clear: Agilysys has a strong recurring software model and a net cash balance sheet, but the stock already prices in a much cleaner earnings path than the company has fully delivered. The latest quarter’s $87.7M of revenue and the TTM 17.4% FCF margin show the business is healthy, yet the 8.8x EV/Revenue multiple and 70.6x trailing P/E leave little margin for error if growth cools or margins stall.
I would raise my rating more toward a buy if quarterly revenue stays above $87.7M for the next two quarters and operating margin moves toward the high teens, because that would show the subscription mix is turning into durable operating leverage rather than just scale. On the other hand, I would move from hold to sell if quarterly revenue growth slips below 10% for two straight quarters or if operating margin falls back toward 10%, meaning the business is no longer converting its gross profit into enough operating earnings to justify the premium multiple. The insider pattern would also become more concerning if selling continues to dominate buying, because that would add another layer of caution to an already demanding valuation.
Weighing both sides, I think the bear case is more likely to show up first because the stock is already priced for continued execution while the latest quarter still showed EBITDA easing to $13.3M from $17.7M sequentially. I am not bearish on the business, but I would need to see the next two quarters prove that the recent earnings strength is becoming a steadier run rate before I would pay up for the shares.
What to Watch Next
- Quarterly revenue above $87.7M — would support a move toward Buy.
- Operating margin moving toward the high teens — would show operating leverage is real.
- Revenue growth below 10% for two straight quarters — would support a move toward Sell.
- Continued FCF margin near 17.4% — would confirm cash conversion remains strong.
- Ongoing insider selling dominance — would add caution at an already rich valuation.
What’s your take? I rated Agilysys (AGYS) HOLD above — but the goal here is to get this right, not just to publish an opinion. What would you add to this analysis, or which risk or catalyst do you think I’m under- or over-weighting? Tell me in the comments.
Sources
- SEC 10-K Annual Report — filed 2026-05-21
- SEC 8-K Filing (2026-06-03)
- SEC 8-K Filing (2026-05-18)
- SEC 8-K Filing (2026-02-02)
- SEC 8-K Filing (2026-01-26)
- SEC Form 4 Insider Transaction (2026-05-29)
- SEC Form 4 Insider Transaction (2026-05-29)
- SEC Form 4 Insider Transaction (2026-05-29)
- SEC 10-K Annual Report — FY2026
- SEC 10-K Annual Report — FY2025
- SEC 10-K Annual Report — FY2024
- SEC 10-K Annual Report — FY2023
- SEC 10-K Annual Report — FY2022
Data sourced from Yahoo Finance and SEC EDGAR. Not investment advice.
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