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Why AGYS Is Sliding for a Second Straight Day

Agilysys (AGYS) is sinking for a second straight day, falling 6% today, after the company reported lower-than-expected revenue for its fiscal third quarter on Tuesday after the market closed. The company, which provides software for the hospitality sector, also provided lower-than-expected sales guidance.

A Look At Agilysys’ Results and Guidance

The company’s Q3 revenue jumped 15% versus the same period a year earlier to $69.6 million. But that was significantly below analysts’ average estimate of $73.15 million. On a positive note, its Q3 earnings per share, excluding certain items, came in at 38 cents, meaningfully above the mean outlook of 34 cents.

An aerial view of a high-rise hotel illuminated in the night sky.

The lobby of a busy hotel, with guests checking in and a staff member welcoming them.

However, AGYS cut its full fiscal year revenue guidance to about $273 million. Previously it had provided full-year revenue guidance of $280 million to $285 million.

Agilysys’ Comments

“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,” CEO Ramesh Srinivasan said in a statement.

The Recent Price Action of AGYS Stock

In the last five days, the shares have sunk 28%, while they are down 31% in the last month.

While we acknowledge the potential of AGYS, 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 AGYS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ ALSO 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock

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

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