Agilysys: Buy The Post-Earnings Dip, Deal Delays Are Only Transitory

2025-01-23 09:00:00 ET

Summary

• Agilysys, a hospitality software company, crashed ~20% after updating its FY25 outlook, citing softer POS software sales.
• Agilysys offers an all-in-one platform for hotels, combining PoS systems, property management, and inventory management, targeting a $4.8 billion market in which it has only single-digit penetration.
• AGYS signed a major property management software deal earlier this year with Marriott, which will start benefiting revenue in the second half of calendar 2025.
• I'm taking the post-earnings dip as a buying opportunity, as the company notes deals have merely delayed and customers are coming back to the table.

We often have to be very careful when assessing massive post-earnings dips: are the factors that caused the dip transitory, or has the company just entered into a multi-year slump that will take time to fix?...

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