Agilysys Inc (NASDAQ: AGYS)

Sector: Technology Industry: Software - Application CIK: 0000078749
Market Cap 2.42 Bn
P/B 7.73
P/E 79.59
P/S 7.79
ROIC (Qtr) 8.43
Div Yield % 0.00
Rev 1y % (Qtr) 15.57
Total Debt (Qtr) 20.30 Mn
Debt/Equity (Qtr) 0.06

About

Agilysys Inc. (AGYS) operates in the hospitality industry, providing software solutions and services to businesses such as hotels, resorts, and casinos. The company's offerings are designed to enhance operational efficiency, drive revenue growth, and improve guest loyalty. Agilysys' solutions are utilized in various countries and regions, with a focus on catering to the unique needs of the hospitality sector. The company generates revenue through the sale of software solutions, subscription and maintenance services, and professional services. Its...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 61.31M provides robust 3.02x coverage of total debt 20.30M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 81.45M provide 15.02x coverage of short-term debt 5.42M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 270.55M provides 13.32x coverage of total debt 20.30M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 61.31M provides exceptional 85.63x coverage of interest expenses 716000, showing strong debt service capability.
  • Robust free cash flow of 59.19M exceeds capital expenditure of 2.12M by 27.85x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 61.31M barely covers its investment activities of (2.94M), with a coverage ratio of -20.88, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (2.94M) provide weak support for R&D spending of 70.75M, which is -0.04x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 81.45M provide limited coverage of acquisition spending of (811000), which is -100.44x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 61.31M provides insufficient coverage of deferred revenue obligations of 92.50M, which is 0.66x, raising concerns about future service delivery capabilities.
  • High receivables of 63.70M relative to inventory of 7.79M (8.17 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 234.56 Bn 28.15 5.46 10.73 Bn
2 CRM Salesforce, Inc. 204.28 Bn 32.96 5.39 11.14 Bn
3 SHOP Shopify Inc. 169.36 Bn 95.09 15.83 1.12 Bn
4 UBER Uber Technologies, Inc 167.13 Bn 10.04 3.37 12.19 Bn
5 INTU Intuit Inc. 140.92 Bn 175.06 33.55 6.78 Bn
6 ADBE Adobe Inc. 124.98 Bn 17.53 5.26 6.65 Bn
7 NOW ServiceNow, Inc. 121.03 Bn 69.24 9.11 2.40 Bn
8 ADP Automatic Data Processing Inc 100.13 Bn 23.64 4.72 4.37 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 5.01 2.50
EV to Cash from Ops. EV/CFO 38.86 12.27
EV to Debt EV to Debt 117.34 50.31
EV to EBIT EV/EBIT 60.27 10.96
EV to EBITDA EV/EBITDA 51.89 16.84
EV to Free Cash Flow [EV/FCF] EV/FCF 40.25 14.08
EV to Market Cap EV to Market Cap 0.98 -118.20
EV to Revenue EV/Rev 7.67 4.45
Price to Book Value [P/B] P/B 7.73 4.27
Price to Earnings [P/E] P/E 79.59 -133.65
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -3.97
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.54
Interest Coverage Int. cover (Qtr) 55.21 -51.80
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -6.30 -210.77
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 34.05 9,906.83
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 1.62
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 33.26 -265.85
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 64.94 55.76
EBIT Growth (1y) % EBIT 1y % (Qtr) 50.76 -227.83
EBT Growth (1y) % EBT 1y % (Qtr) 54.60 -88.00
EPS Growth (1y) % EPS 1y % (Qtr) 41.56 121.91
FCF Growth (1y) % FCF 1y % (Qtr) 6.10 -40.82
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 15.94 92.11
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.65 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.63 3.77
Current Ratio Curr Ratio (Qtr) 1.31 8.19
Debt to Equity Ratio Debt/Equity (Qtr) 0.06 0.16
Interest Cover Ratio Int Coverage (Qtr) 55.21 -51.80
Times Interest Earned Times Interest Earned (Qtr) 55.21 -51.80
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 16.00 -105.77
EBIT Margin % EBIT Margin % (Qtr) 12.73 -131.65
EBT Margin % EBT Margin % (Qtr) 12.50 -122.72
Gross Margin % Gross Margin % (Qtr) 61.70 58.14
Net Profit Margin % Net Margin % (Qtr) 9.80 -127.70