Agilysys Faces Margin and Cash-Flow Questions After Rally

StockStory questioned Agilysys after a six-month rally, pointing to its gross margin and a forecast decline in cash flow. The publisher said the shares had gained 33.8% and outperformed the S&P 500 by 12.7% over that period.

Agilysys averaged a 63.1% gross margin over the last year, according to StockStory. The publisher also noted that gross margin improved by 1.4 percentage points over two years.

Operating profitability moved higher. Agilysys's operating margin rose 7.2 percentage points over two years, reaching 14.6% for the trailing 12 months, StockStory reported.

The concern in the analysis is forward-looking: consensus estimates cited by StockStory forecast the free cash flow margin falling from 24.4% over the last 12 months to 21.3% over the next year. StockStory said the shares traded at 7.1 times forward sales at $96.31 in its article.

As of 17:49 UTC on Sept. 30, Agilysys shares traded at $97.51, up 1.21% since the previous close.