Hospitality Software Provider Agilysys Is Capturing Share From Outdated Legacy Suppliers, Bullish Analyst Says

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  • Oppenheimer analyst Brian Schwartz initiated coverage on Agilysys Inc AGYS at Outperform and a price target of $105.  
  • The analyst believes the company derives a competitive advantage from technological advancements in frictionless data ingestion, smooth third-party systems integrations, workflow, and presentation.
  • Schwartz projects present market opportunity for Agilysys to be over $4 billion in the underserved hospitality sector, with only a small portion served by pure-play SaaS vendors. 
  • The analyst sees Agilysys as capturing share from the legacy suppliers that offer outdated and disjointed solutions in the hospitality industry. 
  • He believes the company's products effectively solve real problems for staff and guests in hospitality businesses by optimizing operations and improving the guest experience and loyalty. 
  • Schwartz is bullish on Agilysys's deal with Marriott International MARcovering over 300K rooms through Property Management Systems software products
  • The analyst believes the deal may expand deployed PMS rooms by 3x over the next three years and drive operating leverage. 
  • The analyst sees Agilysys' inconsistent quarterly results, deceleration in subscription revenue growth and slower EBITDA margin improvement as a matter of concern.
  • Schwartz forecasts revenue growth of 28%, 25%, and 26% in 2023, 2024 and 2025, respectively. He projects adjusted EBITDA margin of 15% each in 2023 and 2024 and 17% in 2025.
  • Price Action: AGYS shares are trading higher by 3.74% at $85.77 on the last check Thursday.
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Posted In: Analyst ColorEquitiesMid CapNewsPrice TargetInitiationMarketsAnalyst RatingsTechBriefsConsumer DiscretionaryExpert IdeasHotels, Resorts & Cruise Lines
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