Agilysys Inc (NASDAQ: AGYS)

Sector: Technology Industry: Software - Application CIK: 0000078749
Market Cap 3.25 Bn
P/B 10.95
P/E 133.37
P/S 10.83
ROIC (Qtr) 7.37
Div Yield % 0.00
Rev 1y % (Qtr) 16.14
Total Debt (Qtr) 20.64 Mn
Debt/Equity (Qtr) 0.07

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 58.31M provides robust 2.82x coverage of total debt 20.64M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 59.34M provide 10.89x coverage of short-term debt 5.45M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 221.94M provides 10.75x coverage of total debt 20.64M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 58.31M provides exceptional 43.42x coverage of interest expenses 1.34M, showing strong debt service capability.
  • Robust free cash flow of 56.19M exceeds capital expenditure of 2.11M by 26.59x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 58.31M barely covers its investment activities of (2.95M), with a coverage ratio of -19.76, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (2.95M) provide weak support for R&D spending of 66.80M, which is -0.04x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 59.34M provide limited coverage of acquisition spending of (811000), which is -73.16x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 58.31M provides insufficient coverage of deferred revenue obligations of 62.89M, which is 0.93x, raising concerns about future service delivery capabilities.
  • High receivables of 36.80M relative to inventory of 7.71M (4.77 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 288.31 Bn 34.60 6.72 10.73 Bn
2 CRM Salesforce, Inc. 248.32 Bn 34.38 6.16 11.14 Bn
3 SHOP Shopify Inc. 212.27 Bn 119.19 19.85 1.12 Bn
4 INTU Intuit Inc. 180.73 Bn 43.89 9.30 6.78 Bn
5 UBER Uber Technologies, Inc 178.38 Bn 10.72 3.60 12.19 Bn
6 NOW ServiceNow, Inc. 146.98 Bn 84.91 11.60 2.40 Bn
7 ADBE Adobe Inc. 144.48 Bn 20.77 6.23 6.64 Bn
8 ADP Automatic Data Processing Inc 108.20 Bn 26.16 5.18 9.77 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 7.58 2.65
EV to Cash from Ops. EV/CFO 55.34 13.37
EV to Debt EV to Debt 156.31 57.69
EV to EBIT EV/EBIT 92.14 19.12
EV to EBITDA EV/EBITDA 77.54 15.00
EV to Free Cash Flow [EV/FCF] EV/FCF 57.42 14.69
EV to Market Cap EV to Market Cap 0.99 -92.28
EV to Revenue EV/Rev 10.76 4.60
Price to Book Value [P/B] P/B 10.95 4.26
Price to Earnings [P/E] P/E 133.37 -136.90
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -3.95
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 2.52
Interest Coverage Int. cover (Qtr) 26.08 -52.32
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 31.68 -259.78
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 8.10 9,763.58
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 1.61
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -73.95 -263.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 56.07 56.46
EBIT Growth (1y) % EBIT 1y % (Qtr) 30.09 -225.15
EBT Growth (1y) % EBT 1y % (Qtr) 27.26 -86.10
EPS Growth (1y) % EPS 1y % (Qtr) -75.62 123.84
FCF Growth (1y) % FCF 1y % (Qtr) 18.78 -36.82
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 16.32 95.08
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.70 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.61 3.75
Current Ratio Curr Ratio (Qtr) 1.22 8.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.07 0.17
Interest Cover Ratio Int Coverage (Qtr) 26.08 -52.32
Times Interest Earned Times Interest Earned (Qtr) 26.08 -52.32
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 15.10 -100.06
EBIT Margin % EBIT Margin % (Qtr) 11.68 -164.24
EBT Margin % EBT Margin % (Qtr) 11.23 -116.94
Gross Margin % Gross Margin % (Qtr) 61.80 58.20
Net Profit Margin % Net Margin % (Qtr) 8.10 -121.65