AGILYSYS, INC. (AGYS): what the price requires
At today's price, AGILYSYS, INC. (AGYS) is priced for today's economics sustained for ~13.3 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/AGYS
Headline
| Field | Value |
|---|---|
| Ticker | AGYS |
| Company | AGILYSYS, INC. |
| Current price | $108.60/sh |
| Composition | Products 13% / Subscription and maintenance 65% / Professional services 23% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin today | 12.4% |
| Must persist for | 13.3y |
| Multiple paid | 78x operating income |
Solve inputs: computed at a 9.3% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.3 years.
How unusual the bet is: high
| Reference | Value |
|---|---|
| vs own history | -1.34σ |
| cohort percentile (of 177 peers) | 95 |
| sustained it ~10 years at this level | 15% |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 6.54x | 5 | expensive |
| Earnings | 5.16x | 5 | expensive |
| Relative | 2.11x | 5 | expensive |
| Growth | 1.02x | 3 | expensive |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $72.31 | 1.50x | yes | FCF base $0.1B, growth 16% (input: historical growth), terminal g 4.0%, WACC 9.2%, 6yr projection |
| DCF Exit Multiple | Growth | $119.66 | 0.91x | yes | Exit EV/EBITDA: 61.8x / 63.8x / 65.8x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $70.15 | 1.55x | yes | P/E 48.39x (blended: static sector reference 35x + trailing (TTM) 80x), scenarios: 39.4x / 48.4x / 57.3x (bear / base = reference held flat / bull), EV/EBITDA 36.65x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $14.75 | 7.36x | yes | BV/sh $11.49, ROE (TTM) 11.9%, ke 9.3% |
| Two-Stage Excess Return | Asset | $16.61 | 6.54x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $106.22 | 1.02x | yes | Rev $0.3B, growth 16% (input: historical growth; tapered), Terminal P/S: 7.9x / 9.7x / 11.5x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $16.44 | 6.61x | yes | EPS $1.37, growth 2% (input: historical EPS growth), PEG=39.81 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $9.42 | 11.53x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.02B × (1−18%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $16.99 | 6.39x | yes | BV $11.49 + 5yr PV of (ROE (TTM) 11.9% − Kₑ 9.3%) × BV; BV grows 7.7%/yr |
| Graham Number | Asset | $18.82 | 5.77x | yes | √(22.5 × EPS $1.37 × BVPS $11.49) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $44.63 | 2.43x | yes | EBITDA $0.05B × sector EV/EBITDA 25.0x |
| FCF Yield | Earnings | $29.35 | 3.70x | yes | FCF $68.1M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $21.05 | 5.16x | yes | SBC-adj FCF $0.05B (FCF $0.07B − SBC $0.02B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $44.21 | 2.46x | yes | EPS $1.37 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $5.66 | 19.19x | yes | BV $11.49 × (ROIC 4.5% / WACC 9.2%) |
| P/Sales Sector | Relative | $89.83 | 1.21x | yes | Revenue $0.32B × sector P/S 8.0x |
| PEG Fair Value | Relative | $51.37 | 2.11x | yes | EPS $1.37 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $14.81 | 7.33x | yes | EPS $1.37 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $116.9m |
| Net debt / NOPAT (after-tax) | -3.76x (net cash) |
| Net debt / operating income (pre-tax) | -3.09x (net cash) |
| Interest coverage | 39.4x |
| Share count CAGR (dilution) | 2.9% |
| Burning cash | no |
Bullet Takeaways
Fiscal 2026 revenue rose 15.9 percent to $319.3 million, with recurring revenue of $205.9 million, or 64.5 percent of sales, and subscription revenue up 30.2 percent. The mix keeps shifting toward the higher-quality, repeatable line.
At $87.45 the stock trades near 63 times operating income, and only the forward-growth methods reach that price. The asset, earnings-power and peer-multiple frames land far below, near $40 on a blended basis.
The balance sheet is clean: no funded debt, about $117 million of net cash, and interest coverage that is effectively unconstrained. Growth here is self-funded, but the price already pays for more than a decade of it continuing.
Bull Case
Start with the earnings trajectory, because it is doing exactly what a software model is supposed to do. Fiscal 2026 revenue grew 15.9 percent to $319.3 million, and the more important number underneath it is the mix: recurring revenue reached $205.9 million, or 64.5 percent of sales, while subscription revenue grew 30.2 percent. In the fourth quarter recurring revenue hit a record $54.4 million, or 65.5 percent of the total. The direction is the thesis. Agilysys sells hospitality software, property-management and point-of-sale systems for hotels, casinos and resorts, and it is converting a once products-and-services business into a subscription one. The filing describes revenue recognized "based on rates per location, including rates per points of sale and per room" (FY2025 10-K, accession 0000950170-25-076527), which is the kind of usage-linked recurring base that compounds as customers add properties and modules.
The operating leverage is starting to show. The company guided fiscal 2027 to revenue of $365 to $370 million, at least 30 percent subscription growth, and an adjusted EBITDA margin of 24 percent, a step up that says the recurring base is now large enough to carry fixed costs while still funding sales. Trailing operating income near $43 million against a 13.5 percent operating margin understates where a 24 percent EBITDA-margin business is heading as the subscription line crowds out lower-margin product revenue. Management has now strung together fifteen consecutive record-revenue quarters, and the Book4Time acquisition added spa and wellness scheduling that widens the product footprint inside the same customer base.
The balance sheet lets all of this happen without dilution risk or refinancing risk. Agilysys carries no funded debt and roughly $117 million of net cash, so interest coverage is effectively unconstrained and the company self-funds its sales build and tuck-in acquisitions. Return on the capital it employs is high because the asset base is light, and the recurring revenue gives forward visibility that a pure-license vendor lacks. A debt-free vendor growing subscription revenue 30 percent into a guided margin expansion is the kind of business whose forward economics the static valuation frames structurally underweight.
Bear Case
The bear case is about how much the price depends on the story holding for a very long time. At $87.45 (June 27, 2026) the stock trades near 63 times operating income, and only the forward-growth DCF reaches that level. Stripped of growth, the methods land far lower: the asset family near $17, earnings power near $21, and the peer-multiple read near $51, for a blended central value close to $40. The price is therefore roughly twice what the static frames support, and inverting it shows the market embedding operating growth held near the self-funding ceiling for about twelve years. Only about one in seven comparable fast-growers has sustained that pace over a decade. The near-term rate is achievable, the company has shown it; the bet is on duration, and twelve years is a long time to assume nothing interrupts the compounding.
The specific narrative dependency is competitive and technological. Agilysys serves a niche, hospitality, against larger software and platform vendors, and its own filing warns of "artificial intelligence (AI), that might render our existing products less competitive or obsolete" and that the company "may not respond effectively to the technological requirements of the changing market" (FY2025 10-K, accession 0000950170-25-076527). The subscription growth that the price is paying for assumes Agilysys keeps winning property-management and point-of-sale displacements against incumbents and keeps customers from moving to a broader platform. A few quarters of slower bookings, or a large customer standardizing elsewhere, would undercut the duration the valuation requires.
The end market adds cyclicality the multiple does not price. Hospitality spending on technology tracks hotel and casino capital budgets, which soften in a travel downturn, so the steady 30 percent subscription growth is not guaranteed to be recession-proof. The company also still depends on third-party hardware and technology, and warns that supply disruptions "could result in service disruptions to our customers and significant time, expense, or exposure to us" (same filing). None of these is fatal, but at a multiple that prices a decade of uninterrupted compounding, even an ordinary stumble, a guidance trim, a slower-than-30-percent subscription quarter, a soft travel cycle, leaves a long way to fall toward where the asset and earnings methods sit.
Valuation
The price decomposes as a durability premium. Asset, earnings-power and peer-multiple models all read richly valued, and only the forward-growth DCF reaches the $87.45 quote, against a blended central value near $40. The asset family sits well below the price, reflecting a light balance sheet where book value is small relative to the market's valuation of the recurring stream. The earnings family, near $21, prices the business as if growth stopped, which it plainly has not. The peer-multiple family lands closer, near $51, using software-sector multiples that already embed growth.
The gap to the price is the growth bet. Inverting the current price, the market is paying about 63 times operating income, which implies company-wide operating growth held near its self-funding ceiling for roughly twelve years. The near-term pace is within what Agilysys has recently delivered, with fiscal 2026 revenue up 15.9 percent, subscription revenue up 30.2 percent, and fiscal 2027 guidance of $365 to $370 million in revenue with a 24 percent adjusted EBITDA margin. So the stretch is in the duration, not the rate. Historically only about 15 percent of comparable fast-growers sustained that pace across a window this long. The balance sheet supports the bet, with no funded debt and roughly $117 million of net cash, so the company can fund the growth itself. But the valuation leaves no room for the subscription compounding to fade early. This is a high-quality, self-funded software compounder priced for an unusually long runway, where the reward depends on the recurring base holding its growth rate well past the point most companies decelerate.
Catalysts
Subscription growth against guidance is the central catalyst. Management guided fiscal 2027 to revenue of $365 to $370 million, at least 30 percent subscription revenue growth, and a 24 percent adjusted EBITDA margin. Each quarterly report is a check on whether subscription growth stays at or above 30 percent and whether the margin step-up is materializing, since both are what the valuation is paying for. Fiscal 2026 closed at $319.3 million in revenue with recurring revenue at 64.5 percent of sales, so the path to the guided range is visible but not automatic.
New-customer and module adoption is the operational catalyst underneath the numbers. The company has reported fifteen consecutive record-revenue quarters and continues to sign subscription license agreements with new properties, while the Book4Time acquisition added spa and wellness scheduling that can be cross-sold into the existing hotel and casino base. Watch the cadence of new logo wins and product attach, because that is what extends the runway the price assumes.
The next quarterly print is the near-term marker. The recurring-revenue percentage, the subscription growth rate, and any change to the fiscal 2027 guidance will be the items that move the stock, since the price is built on the duration of that subscription growth. A travel or hospitality capital-spending slowdown would be the main external risk to monitor, since it would pressure the bookings that feed the recurring base.
Peer Cohorts (Per Segment, With Filing Citations)
Hospitality Software (reported)
- NTCT (NETSCOUT SYSTEMS, INC.)
- (no filing in the citation store)
- PEGA (PEGASYSTEMS INC.)
- (no filing in the citation store)
- CSGS (CSG SYSTEMS INTERNATIONAL, INC.)
- (no filing in the citation store)
- WAY (Waystar Holding Corp.)
- (no filing in the citation store)
- FA (First Advantage Corporation)
- (no filing in the citation store)
- IOT (SAMSARA INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.