Is it too late to consider buying Agilysys, Inc. (NASDAQ: AGYS)?

Agilysys, Inc. (NASDAQ:AGYS) is not the largest company out there, but it has garnered a lot of attention due to a substantial price increase on the NASDAQGS over the past few months. The company’s trading levels have reached their highest level in the past year, following the recent rally in the stock price. As a mid-cap stock that is widely covered by analysts, it is safe to assume that any recent changes in the company’s outlook are already factored into the stock price. But what if there is still a buying opportunity? Let’s examine Agilysys’ outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Agilysys

What is the opportunity at Agilysys?

According to our price multiple model, which compares the company’s price-to-earnings ratio to the industry average, the stock price appears justified. In this case, we used the price-to-earnings (PE) ratio since there is not enough information to reliably forecast the stock’s cash flows. We find that Agilysys’s 32.73x ratio is trading slightly below its industry peers’ 40.88x ratio, meaning that if you buy Agilysys today, you’ll be paying a reasonable price for the stock. And if you believe Agilysys should trade at this level over the long term, then there isn’t much upside to be gained relative to other industry peers. Furthermore, Agilysys’ stock price also appears relatively stable relative to the rest of the market, as indicated by its low beta. This may mean that the stock is less likely to decline due to natural market volatility, suggesting fewer buying opportunities in the future.

What type of growth will Agilysys generate?

Investors looking for growth for their portfolio may want to consider a company’s prospects before buying its shares. Buying a great company with a solid outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. However, with an extremely negative double-digit change in earnings expected over the next two years, short-term growth is certainly not a major factor in a buying decision. It seems that a lot of uncertainty is on the cards for Agilysys, at least in the near future.

What this means for you

Are you a shareholder? Currently, AGYS appears to be trading around industry price multiples, but given the uncertainty of negative returns in the future, this could be a good time to reduce risk in your portfolio. Is your current exposure to the stock beneficial for your overall portfolio? And is the opportunity cost of holding a stock with a negative outlook too high? Before making a decision on AGYS, check whether its fundamentals have changed.

Are you a potential investor? If you have been watching AGYS for a while, now may not be the most advantageous time to buy, given that the stock is trading around industry price multiples. This means that there is less upside to be gained from a mispricing. Additionally, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors that we have not considered today that can help shape your view on AGYS if the price fluctuates below the industry price-to-earnings ratio.

If you want to learn more about Agilysys, you should also look at the risks it currently faces. To help you out, we’ve discovered 4 warning signs (2 are concerning!) that you should be aware of before buying Agilysys stock.

If you are no longer interested in Agilysys, you can use our free platform to view our list of over 50 other stocks with high growth potential.

Do you have any comments on this article? Are you concerned about its content? Get in touch with us directly. You can also send an email to editorial-team (at) simplywallst.com.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to constitute financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. Our goal is to provide you with focused, long-term analysis based on fundamental data. Please note that our analysis may not factor in the latest price-sensitive company announcements or qualitative information. Simply Wall St has no position in any of the stocks mentioned.

Do you have any comments on this article? Are you concerned about its content? Contact us directly. You can also send an email to [email protected]