Intrinsic value of Agilysys, Inc. - AGYS

Previous Close

$27.78

  Intrinsic Value

$0.96

stock screener

  Rating & Target

str. sell

-97%

Previous close

$27.78

 
Intrinsic value

$0.96

 
Up/down potential

-97%

 
Rating

str. sell

We calculate the intrinsic value of AGYS stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  15.00
  14.00
  13.10
  12.29
  11.56
  10.90
  10.31
  9.78
  9.30
  8.87
  8.49
  8.14
  7.82
  7.54
  7.29
  7.06
  6.85
  6.67
  6.50
  6.35
  6.22
  6.09
  5.98
  5.89
  5.80
  5.72
  5.65
  5.58
  5.52
  5.47
Revenue, $m
  146
  166
  188
  211
  236
  262
  289
  317
  346
  377
  409
  442
  477
  513
  550
  589
  630
  672
  715
  761
  808
  857
  908
  962
  1,018
  1,076
  1,137
  1,200
  1,266
  1,336
Variable operating expenses, $m
  158
  180
  204
  229
  255
  282
  311
  342
  373
  406
  439
  475
  512
  550
  590
  632
  675
  720
  767
  816
  867
  919
  975
  1,032
  1,092
  1,154
  1,219
  1,287
  1,358
  1,433
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  158
  180
  204
  229
  255
  282
  311
  342
  373
  406
  439
  475
  512
  550
  590
  632
  675
  720
  767
  816
  867
  919
  975
  1,032
  1,092
  1,154
  1,219
  1,287
  1,358
  1,433
Operating income, $m
  -12
  -14
  -16
  -17
  -19
  -21
  -23
  -25
  -27
  -29
  -30
  -32
  -35
  -37
  -40
  -43
  -46
  -49
  -52
  -55
  -59
  -62
  -66
  -70
  -74
  -78
  -83
  -87
  -92
  -97
EBITDA, $m
  -8
  -9
  -10
  -11
  -12
  -14
  -15
  -16
  -18
  -20
  -21
  -23
  -25
  -27
  -29
  -31
  -33
  -35
  -37
  -39
  -42
  -44
  -47
  -50
  -53
  -56
  -59
  -62
  -66
  -69
Interest expense (income), $m
  0
  0
  0
  1
  1
  2
  2
  3
  3
  4
  5
  5
  6
  7
  7
  8
  9
  10
  10
  11
  12
  13
  14
  15
  16
  17
  18
  20
  21
  22
  24
Earnings before tax, $m
  -12
  -14
  -16
  -18
  -21
  -23
  -26
  -28
  -31
  -34
  -35
  -38
  -41
  -45
  -48
  -52
  -55
  -59
  -63
  -68
  -72
  -77
  -81
  -86
  -91
  -97
  -102
  -108
  -114
  -121
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -12
  -14
  -16
  -18
  -21
  -23
  -26
  -28
  -31
  -34
  -35
  -38
  -41
  -45
  -48
  -52
  -55
  -59
  -63
  -68
  -72
  -77
  -81
  -86
  -91
  -97
  -102
  -108
  -114
  -121

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  181
  206
  233
  262
  292
  324
  357
  392
  429
  467
  506
  547
  590
  635
  681
  729
  779
  831
  885
  941
  1,000
  1,061
  1,124
  1,190
  1,259
  1,331
  1,407
  1,485
  1,567
  1,653
Adjusted assets (=assets-cash), $m
  181
  206
  233
  262
  292
  324
  357
  392
  429
  467
  506
  547
  590
  635
  681
  729
  779
  831
  885
  941
  1,000
  1,061
  1,124
  1,190
  1,259
  1,331
  1,407
  1,485
  1,567
  1,653
Revenue / Adjusted assets
  0.807
  0.806
  0.807
  0.805
  0.808
  0.809
  0.810
  0.809
  0.807
  0.807
  0.808
  0.808
  0.808
  0.808
  0.808
  0.808
  0.809
  0.809
  0.808
  0.809
  0.808
  0.808
  0.808
  0.808
  0.809
  0.808
  0.808
  0.808
  0.808
  0.808
Average production assets, $m
  62
  71
  80
  90
  100
  111
  122
  134
  147
  160
  173
  188
  202
  217
  233
  250
  267
  285
  303
  322
  343
  363
  385
  408
  431
  456
  482
  509
  537
  566
Working capital, $m
  -24
  -27
  -30
  -34
  -38
  -42
  -46
  -51
  -56
  -61
  -66
  -71
  -77
  -83
  -89
  -95
  -101
  -108
  -115
  -122
  -130
  -138
  -146
  -155
  -164
  -173
  -183
  -193
  -204
  -215
Total debt, $m
  7
  15
  24
  33
  42
  52
  62
  73
  84
  96
  108
  121
  134
  148
  163
  177
  193
  209
  226
  243
  261
  280
  300
  320
  342
  364
  387
  412
  437
  464
Total liabilities, $m
  56
  64
  72
  81
  91
  100
  111
  122
  133
  145
  157
  170
  183
  197
  211
  226
  242
  258
  274
  292
  310
  329
  349
  369
  390
  413
  436
  460
  486
  512
Total equity, $m
  125
  142
  161
  181
  201
  223
  246
  271
  296
  322
  349
  378
  407
  438
  470
  503
  538
  573
  611
  649
  690
  732
  776
  821
  869
  919
  971
  1,025
  1,081
  1,140
Total liabilities and equity, $m
  181
  206
  233
  262
  292
  323
  357
  393
  429
  467
  506
  548
  590
  635
  681
  729
  780
  831
  885
  941
  1,000
  1,061
  1,125
  1,190
  1,259
  1,332
  1,407
  1,485
  1,567
  1,652
Debt-to-equity ratio
  0.060
  0.110
  0.150
  0.180
  0.210
  0.230
  0.250
  0.270
  0.280
  0.300
  0.310
  0.320
  0.330
  0.340
  0.350
  0.350
  0.360
  0.360
  0.370
  0.370
  0.380
  0.380
  0.390
  0.390
  0.390
  0.400
  0.400
  0.400
  0.400
  0.410
Adjusted equity ratio
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690
  0.690

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -12
  -14
  -16
  -18
  -21
  -23
  -26
  -28
  -31
  -34
  -35
  -38
  -41
  -45
  -48
  -52
  -55
  -59
  -63
  -68
  -72
  -77
  -81
  -86
  -91
  -97
  -102
  -108
  -114
  -121
Depreciation, amort., depletion, $m
  5
  5
  6
  6
  7
  7
  8
  8
  9
  10
  9
  9
  10
  11
  12
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  23
  24
  25
  27
  28
Funds from operations, $m
  -8
  -9
  -11
  -12
  -14
  -16
  -18
  -20
  -22
  -24
  -26
  -29
  -31
  -34
  -37
  -39
  -42
  -45
  -48
  -52
  -55
  -59
  -62
  -66
  -70
  -74
  -79
  -83
  -88
  -93
Change in working capital, $m
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
Cash from operations, $m
  -5
  -6
  -7
  -9
  -10
  -12
  -13
  -15
  -17
  -19
  -21
  -23
  -26
  -28
  -31
  -33
  -36
  -38
  -41
  -44
  -47
  -51
  -54
  -57
  -61
  -65
  -69
  -73
  -77
  -82
Maintenance CAPEX, $m
  -3
  -3
  -3
  -4
  -4
  -5
  -5
  -6
  -7
  -7
  -8
  -9
  -9
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -23
  -24
  -25
  -27
New CAPEX, $m
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
Cash from investing activities, $m
  -11
  -12
  -12
  -14
  -14
  -16
  -16
  -18
  -19
  -20
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -31
  -33
  -34
  -36
  -38
  -40
  -42
  -44
  -46
  -49
  -51
  -53
  -56
Free cash flow, $m
  -15
  -17
  -20
  -22
  -25
  -28
  -30
  -33
  -36
  -39
  -43
  -46
  -50
  -53
  -57
  -61
  -65
  -69
  -74
  -79
  -83
  -88
  -94
  -99
  -105
  -111
  -117
  -124
  -130
  -138
Issuance/(repayment) of debt, $m
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  20
  21
  21
  22
  23
  24
  25
  27
Issuance/(repurchase) of shares, $m
  29
  32
  35
  38
  42
  45
  49
  52
  56
  60
  62
  66
  71
  75
  80
  85
  90
  95
  101
  106
  112
  119
  125
  132
  139
  146
  154
  162
  171
  180
Cash from financing (excl. dividends), $m  
  36
  40
  43
  47
  51
  55
  59
  63
  67
  72
  74
  79
  84
  89
  94
  100
  105
  111
  118
  123
  130
  138
  145
  153
  160
  168
  177
  186
  196
  207
Total cash flow (excl. dividends), $m
  21
  22
  24
  25
  26
  27
  29
  30
  31
  32
  32
  33
  34
  36
  37
  39
  40
  42
  43
  45
  47
  49
  51
  53
  56
  58
  60
  63
  66
  69
Retained Cash Flow (-), $m
  -29
  -32
  -35
  -38
  -42
  -45
  -49
  -52
  -56
  -60
  -62
  -66
  -71
  -75
  -80
  -85
  -90
  -95
  -101
  -106
  -112
  -119
  -125
  -132
  -139
  -146
  -154
  -162
  -171
  -180
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -8
  -10
  -11
  -13
  -15
  -18
  -20
  -22
  -25
  -28
  -30
  -33
  -36
  -40
  -43
  -46
  -50
  -53
  -57
  -61
  -65
  -70
  -74
  -79
  -84
  -89
  -94
  -99
  -105
  -111
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  -8
  -9
  -10
  -11
  -12
  -13
  -14
  -14
  -14
  -14
  -14
  -14
  -14
  -13
  -13
  -12
  -11
  -10
  -9
  -8
  -7
  -6
  -5
  -4
  -3
  -3
  -2
  -2
  -1
  -1
Current shareholders' claim on cash, %
  95.8
  91.9
  88.3
  85.0
  81.8
  78.9
  76.1
  73.6
  71.1
  68.8
  66.7
  64.6
  62.7
  60.8
  59.0
  57.3
  55.6
  54.1
  52.5
  51.1
  49.6
  48.3
  46.9
  45.6
  44.4
  43.2
  42.0
  40.9
  39.8
  38.7

Agilysys, Inc. is a technology company. The Company provides software for point-of-sale (POS), property management, inventory and procurement, workforce management, analytics, document management, and mobile and wireless solutions and services to the hospitality industry. The Company serves four market sectors: gaming, both corporate and tribal; hotels, resorts and cruise; foodservice management, and restaurants, universities, stadia and healthcare. The Company is a developer and marketer of software enabled solutions and services to the hospitality industry, including hardware and software products; support, maintenance and subscription services, and professional services. The rGuest platform is designed to run as a Software-as-a-Service (SaaS)-based platform on the public cloud, private cloud, on-premise or in a hybrid configuration. The rGuest platform includes various in-market solutions, such as rGuest Stay, rGuest Buy, rGuest Seat, rGuest Pay and rGuest Analyze.

FINANCIAL RATIOS  of  Agilysys, Inc. (AGYS)

Valuation Ratios
P/E Ratio -53.7
Price to Sales 5
Price to Book 5.7
Price to Tangible Book
Price to Cash Flow 214.9
Price to Free Cash Flow -49.6
Growth Rates
Sales Growth Rate 6.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -23.8%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -6.8%
Ret/ On Assets - 3 Yr. Avg. -5.1%
Return On Total Capital -10.1%
Ret/ On T. Cap. - 3 Yr. Avg. -7.6%
Return On Equity -10.1%
Return On Equity - 3 Yr. Avg. -7.6%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 50%
Gross Margin - 3 Yr. Avg. 54.8%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. -1.9%
Operating Margin -8.6%
Oper. Margin - 3 Yr. Avg. -8.1%
Pre-Tax Margin -8.6%
Pre-Tax Margin - 3 Yr. Avg. -8.1%
Net Profit Margin -9.4%
Net Profit Margin - 3 Yr. Avg. -8.1%
Effective Tax Rate -9.1%
Eff/ Tax Rate - 3 Yr. Avg. -0.5%
Payout Ratio 0%

AGYS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AGYS stock intrinsic value calculation we used $127 million for the last fiscal year's total revenue generated by Agilysys, Inc.. The default revenue input number comes from 0001 income statement of Agilysys, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our AGYS stock valuation model: a) initial revenue growth rate of 15% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for AGYS is calculated based on our internal credit rating of Agilysys, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Agilysys, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of AGYS stock the variable cost ratio is equal to 108.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for AGYS stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Agilysys, Inc..

Corporate tax rate of 27% is the nominal tax rate for Agilysys, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the AGYS stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for AGYS are equal to 42.4%.

Life of production assets of 20.2 years is the average useful life of capital assets used in Agilysys, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for AGYS is equal to -16.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $108.431 million for Agilysys, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 23.535 million for Agilysys, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Agilysys, Inc. at the current share price and the inputted number of shares is $0.7 billion.

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