Prosper Stars & Stripes, a long/short equity fund, recently released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter of 2025, Prosper Stars & Stripes achieved a net return of +9.8%. In comparison, its long/short equity hedge fund peer group, as indicated by the HFRX Equity Hedge (Total) Index (the “HFRX”), reported a total return of +3.8%. Additionally, the long-only small-cap Russell 2000 Index (the “Russell”) had a total return of +12.4%. Year to date, the fund returned +8.6% compared to a total return of +13.6% for the HFRI and +10.4% for the Russell. The Composite’s long book delivered strong performance in both the third quarter and year-to-date 2025. The short book detracted from performance both in the third quarter and year-to-date in 2025. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its third-quarter 2025 investor letter, Prosper Stars & Stripes 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 -3.03%, and its shares lost 6.11% of their value over the last 52 weeks. On November 27, 2025, Agilysys, Inc. (NASDAQ:AGYS) stock closed at $125.71 per share, with a market capitalization of $3.525 billion.
Prosper Stars & Stripes stated the following regarding Agilysys, Inc. (NASDAQ:AGYS) in its third quarter 2025 investor letter:
“Another idiosyncratic investment in the Composite is Agilysys, Inc. (NASDAQ:AGYS). Agilysys provides property management systems (PMS) and point-of-sale (POS) solutions to the hospitality industry. We see Agilysys as a company with an extraordinarily favorable competitive position and a large market opportunity that is just getting underway. This mission-critical software serves as the system of record for hotels, resorts, and casinos. Competition has been limited because the incumbent Micros, owned by Oracle, has been managed primarily for cash within a company too large to prioritize the segment. Agilysys currently manages about 300,000 rooms in an industry with more than five million. The company has delivered seven consecutive quarters of 30% or greater subscription revenue growth. In its recent FQ2 2026 report, management raised FY26 subscription guidance from 27% to 29%. These figures exclude the Marriott contract won in December 2022, which we expect will add more than 400,000 rooms over the next two to three years. We believe this deal could contribute $130 million to subscription revenue, nearly doubling the current base. We also believe margins could expand by roughly 1,500 basis points as Agilysys moves toward its $1 billion annual revenue goal. We expect other potential customers will want to upgrade their systems and this will further accelerate growth. Looking ahead, we believe AGYS can earn $4.75 per share within a couple of years without additional deals, and we see upside to a price target of approximately $160 per share.”
Agilysys, Inc. (NASDAQ:AGYS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held Agilysys, Inc. (NASDAQ:AGYS) at the end of the third quarter, which was 26 in the previous quarter. In the fiscal second quarter of 2026, Agilysys, Inc. (NASDAQ:AGYS) reported revenue of $79.3 million, a 16.1% increase year-over-year, marking the 15th consecutive quarter of record results. While we acknowledge the risk and potential of Agilysys, Inc. (NASDAQ:AGYS) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Agilysys, Inc. (NASDAQ:AGYS) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Agilysys, Inc. (NASDAQ:AGYS) and shared Prosper Stars & Stripes’ views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
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