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On Tuesday, Cantor Fitzgerald analysts initiated coverage on Agilysys Inc. (NASDAQ: NASDAQ:AGYS) with an Overweight rating and set a price target of $125. The decision reflects confidence in the company’s positioning within the hospitality market. According to InvestingPro data, the stock currently trades at $108.20, with analysts’ targets ranging from $90 to $152.
The analysts outlined that the price target is based on Agilysys shares trading at 11.3 times their fiscal year 2027 revenue estimate, compared to the current multiple of 9.6. Agilysys is noted for its strong revenue growth of 16.1%, robust free cash flow generation of $52.3 million, and healthy operating margins with a gross profit margin of 62.4%, supported by a deep industry focus and a comprehensive product suite. InvestingPro analysis reveals 14 additional key insights about AGYS’s valuation and growth prospects.
The analysts emphasized the company’s potential to leverage digital transformation trends within the hospitality sector and expand its recurring revenue base. Agilysys’s strategic initiatives are expected to drive significant growth in the coming years.
Additionally, a contract with Marriott is anticipated, which could further bolster Agilysys’s financial performance. Although the company has reported minimal revenue from this contract to date, most costs have already been integrated into its cost structure, with major topline growth expected to commence in late calendar year 2025.
In other recent news, Agilysys Inc. reported strong fourth-quarter fiscal year 2025 earnings, surpassing analyst expectations with an earnings per share (EPS) of $0.54, significantly higher than the forecasted $0.35. The company achieved a revenue of $74.3 million, exceeding the projected $71.58 million, marking a 19.4% year-over-year increase. Subscription revenue played a key role in this growth, rising by 42.7% compared to the previous year. For fiscal year 2026, Agilysys has provided a revenue guidance range of $308 million to $312 million, with anticipated subscription revenue growth of 25%.
Additionally, Needham analysts raised their price target for Agilysys to $105, maintaining a Buy rating. This decision follows Agilysys’s robust financial performance and the company’s promising growth trajectory, including the recent implementation of its point-of-sale system by Boyd Gaming (NYSE:BYD) across 28 properties. Despite providing a revenue guide for fiscal year 2026 below expectations, Needham suggests that the guidance might be conservative, as it does not include potential revenue from the upcoming Marriott Property Management System roll-out.
The company’s backlog has increased by 26% year-over-year, and Agilysys added 16 new logos in the fourth quarter, underscoring its strong market position. The firm’s strategic investments in research and development, alongside the expansion of its sales teams, are expected to sustain its growth momentum. Agilysys continues to focus on innovation in hospitality technology, positioning itself as a key player in the industry.
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