What Happened?

Shares of hospitality industry software provider Agilysys (NASDAQ:AGYS) fell 21.6% in the pre-market session after the company reported disappointing financial results for the fourth quarter (fiscal Q3 2025). Revenue in the quarter missed and its full-year revenue guidance missed significantly after being dropped from previous levels. The company said, "Revenue levels, especially one-time product revenue, continue to be impacted by recent sales challenges with point-of-sale products, mainly in the managed food services vertical, caused by our final modernization transition phase." Overall, this was a weaker quarter.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Agilysys? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Agilysys’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. Moves this big are rare for Agilysys and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 8 months ago when the stock gained 14.4% on the news that the company reported strong first-quarter results, with revenue slightly exceeding analysts' expectations while EPS beat by a more convincing margin. Agilysys's free cash flow generation also exceeded analysts' estimates. Notably, the top line benefited from growth in subscription and professional services, as demand for POS (point-of-sale) and POS-related modules remained strong. Looking ahead, its revenue forecast for next year was in line with expectations. On the other hand, its gross margin fell. Zooming out, we think this was still a decent, albeit mixed, quarter, showing that the company is staying on track.

Agilysys is down 22.9% since the beginning of the year, and at $99.92 per share, it is trading 29.5% below its 52-week high of $141.74 from December 2024. Investors who bought $1,000 worth of Agilysys’s shares 5 years ago would now be looking at an investment worth $3,494.

When a company has more cash than it knows what to do with, buying back its own shares can make a lot of sense–as long as the price is right. Luckily, we’ve found one, a low-priced stock that is gushing free cash flow AND buying back shares. Click here to claim your Special Free Report on a fallen angel growth story that is already recovering from a setback.