Hospitality Software Provider Agilysys Is Capturing Share From Outdated Legacy Suppliers, Bullish Analyst Says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The analyst sees Agilysys as capturing share from the legacy suppliers that offer outdated and disjointed solutions in the hospitality industry.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 MAR, covering 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.