Agilysys (AGYS) Fell After Reporting Lower Than Expected Results

Fred Alger Management, an investment management company, released its “Alger Weatherbie Specialized Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. equities experienced increased volatility in the first quarter due to changing fiscal, monetary, and trade policies. Uncertainty arose from the emergence of advanced AI models from China. Against this backdrop, Class A shares of the fund underperformed the Russell 2500 Growth Index in the quarter. The Consumer Discretionary and Industrials sectors contributed to the fund’s performance in the quarter, while Health Care and Information Technology detracted. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Alger Weatherbie Specialized Growth Fund highlighted stocks such as Agilysys, Inc. (NASDAQ:AGYS). Agilysys, Inc. (NASDAQ:AGYS) develops and markets software solutions and services to the hospitality industry. The one-month return of Agilysys, Inc. (NASDAQ:AGYS) was 7.89%, and its shares lost 17.72% of their value over the last 52 weeks. On June 17, 2025, Agilysys, Inc. (NASDAQ:AGYS) stock closed at $109.37 per share, with a market capitalization of $3.064 billion.

Alger Weatherbie Specialized Growth Fund stated the following regarding Agilysys, Inc. (NASDAQ:AGYS) in its Q1 2025 investor letter:

“Agilysys, Inc. (NASDAQ:AGYS) provides innovative software solutions for the hospitality industry, including point-of-sale (POS) systems, payment gateways, reservation and table management, guest offers management, property management, inventory and procurement, analytics, document management, and mobile and wireless services. During the quarter, shares detracted from performance after the company reported lower-than-expected fiscal third quarter revenues. The revenue shortfall was primarily due to weaker-than-expected POS software sales, particularly within the Managed Food Service segment, and softer international sales. As a result, management lowered their full-year revenue guidance, citing near-term challenges associated with transitioning their POS product to a new version.”

Why Is Agilysys Inc (AGYS) Plunging In 2025?

An expert IT engineer demonstrating a new software solution to hotel managers in a boardroom.

Agilysys, Inc. (NASDAQ:AGYS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held Agilysys, Inc. (NASDAQ:AGYS) at the end of the first quarter, which was 20 in the previous quarter. In the fiscal fourth quarter of 2025, Agilysys, Inc. (NASDAQ:AGYS) reported a record revenue of $74.3 million, reflecting an increase of 19.4% from prior year’s comparable quarter. While we acknowledge the potential of Agilysys, Inc. (NASDAQ:AGYS) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Agilysys, Inc. (NASDAQ:AGYS) and shared the list of oversold NASDAQ stocks to buy. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of AGYS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.