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Agilysys, Inc. (NASDAQ:AGYS) just released its latest quarterly results and things are looking bullish. The results overall were pretty good, with revenues of US$30m exceeding expectations and statutory losses coming in at justUS$0.07 per share, some 49% below what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the five analysts covering Agilysys provided consensus estimates of US$145.0m revenue in 2021, which would reflect a small 4.7% decline on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 91% to US$0.13. Before this latest report, the consensus had been expecting revenues of US$145.2m and US$0.31 per share in losses. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading revenues and making a losses per share in particular.
The average price target held steady at US$24.50, seeming to indicate that business is performing in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Agilysys at US$27.00 per share, while the most bearish prices it at US$22.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Agilysys is an easy business to forecast or the the analysts are all using similar assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 4.7%, a significant reduction from annual growth of 6.6% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 12% next year. It's pretty clear that Agilysys' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Agilysys' revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$24.50, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Agilysys. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Agilysys analysts - going out to 2022, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Agilysys you should be aware of.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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