Agilysys Inc (AGYS) PT Raised to $50 at Craig-Hallum After Beat/Raise Quarter
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Craig-Hallum analyst George Sutton raised the price target on Agilysys Inc (NASDAQ: AGYS) to $50.00 (from $45.00) after the company reported FY23 revenue ahead of consensus, largely driven by better Product and Professional Services revenue, and 33% y/y growth in Subscription revenues. Subscription revenue growth accelerated from 25% and 22% y/y growth in 3Q22 and 2Q22, respectively, and is expected to grow 30% in FY23.
The analyst reiterated a Buy rating, stating "the company is clearly demonstrating that it has outmaneuvered its largest competitor in hospitality software, Oracle, who barely (if at all) addresses the business unit on its earnings calls. We also like the company’s position against its macro-environment, where five out of the seven key verticals are still in recovery, providing incremental upside potential. What’s more, full-year free cash flow covered the entirety of the opportunistic ResortSuite acquisition ($25M vs. $27.3M FCF). Improving cash collections resulted in 100% of Adj. EBITDA converting into FCF. Adj. EBITDA margins for FY23 are expected to remain “greater than 15%”."
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