Needham has maintained a Buy rating on Agilysys Inc and left its price target unchanged at $140.00 after the company released third-quarter fiscal 2026 results. The shares were trading at $113.55 at the time of reporting, a level well above the 52-week low of $63.71 but still under Needham’s stated target, implying potential upside if analyst expectations materialize.
Quarterly results outpaced Needham’s projections for both revenue and EBITDA, fueled in large part by subscription revenue that grew 23% year-over-year. Data cited alongside the results show the company’s revenue expanded at a rate of 17.77% over the last twelve months, underscoring a continued top-line growth trend for the hospitality-focused software business.
Despite the beat on revenue, Agilysys shares fell by roughly 12% in after-hours trading. Market reaction appeared linked to implied guidance for the fourth quarter indicating subscription growth slowing to 20% year-over-year. Additional technical indicators referenced with the report show the stock’s relative strength index is in territory commonly interpreted as oversold, and four analysts have recently revised upcoming earnings estimates higher.
The research firm pointed to softer sales in the gaming/casino vertical and in international markets during the quarter, and attributed those weakness pockets mainly to seasonal dynamics. Even so, Needham expressed confidence in the company’s overall sales momentum. The firm highlighted an ongoing property management system implementation with Marriott as a meaningful catalyst, and noted that as the company converts backlog, accelerates subscription growth and expands margins, there could be upside to both near-term and medium-term Street estimates.
Agilysys reported third-quarter fiscal 2026 revenue of $80.4 million, topping the analysts’ consensus of $79.07 million. On the profitability side, the company posted earnings per share of $0.42, missing the consensus of $0.46. The revenue outperformance was nonetheless cited as a positive factor in the market’s response to the announcement.
Separately, Cantor Fitzgerald reaffirmed an Overweight rating on Agilysys and kept a $140.00 price target in place following the earnings release. That firm noted that Agilysys met expectations and raised its implied revenue guidance for the fourth quarter of fiscal 2026, signaling continued analyst support for the company’s strategy and near-term outlook.
Context and interpretation - The quarter presented a mixed set of signals: robust subscription and revenue growth that exceeded expectations, a modest EPS shortfall, and guidance implying a somewhat slower subscription expansion next quarter. Analysts appear focused on backlog conversion, ongoing large-scale implementations and margin expansion as the primary levers that could lift estimates if realized.