This is a step-by-step stock review to answer the question, is Microsoft (MSFT) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
1. Agilysys Company History
When investing in stocks, it’s important to know the company’s history. This helps us understand the various revenue streams, if they acquired other companies, how they grew through difficult times, and how they separated themselves from the competition.
Agilysys, founded in 1963, rapidly emerged as a tech leader in hospitality and retail. Through the 2010s, it innovated with cutting-edge software and expanded globally. In the 2020s, amidst tech advancements, Agilysys doubled down on delivering unparalleled solutions. Today, it continues to redefine the industry, trusted by thousands worldwide for seamless, personalized experiences. With a relentless focus on innovation and customer satisfaction, Agilysys shapes the future of hospitality and retail.
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: Watch
- Score: 50
- MOS: 80%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Agilysys makes money:
- Software Solutions: Agilysys generates revenue through the sale of its software solutions tailored for hospitality and retail businesses, including point-of-sale systems, property management software, inventory management, and analytics tools.
- Subscription Services: The company offers subscription-based services for its cloud-based software platforms, providing customers with ongoing access to updates, support, and additional features.
- Implementation and Integration Services: Agilysys provides professional services for the implementation, customization, and integration of its software solutions into clients’ existing systems, generating revenue through consulting fees and service contracts.
- Maintenance and Support: Agilysys offers maintenance and support services to its customers, including technical support, software updates, and troubleshooting assistance, typically provided through annual maintenance contracts.
- Hardware Sales: In addition to software, Agilysys generates revenue from the sale of hardware such as POS terminals, tablets, and peripherals, often bundled with its software solutions or sold separately.
- Training and Education: The company offers training programs and educational resources for customers to learn how to use its software effectively, generating revenue through training fees and certification programs.
- Transaction Processing Fees: Agilysys may also earn revenue through transaction processing fees, particularly for solutions that facilitate payment processing and online ordering, where the company takes a small percentage of each transaction processed through its platform.
Here are a few of the other companies that Agilysys has acquired over the years. This is important because a company will use a “Buy before build” philosophy to go to market faster and add additional streams of revenue. A company with more revenue streams has a more stable business model. Keep in mind, that most companies don’t build new software because it takes too long to go to market and generate revenue.
- Visual One Systems (2015)
- Eatec Corporation (2017)
- InfoGenesis (2017)
- Harbortouch (2020)
- INTELITY (2020)
- Raima (2021)
- STAYNTOUCH (2021)
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Agilysys stacks up against other companies.
- Descartes Systems Group (DSGX) – 83/100)
- Karooooo (KARO) – 83/100
- OppFi (OPFI) – 78/100
- Immersion Corporation (IMMR) – 78/100
- Agilysys (AGYS) – 50/100
- Lightspeed Commerce (LSPD) – 39/100
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- Strategic Leadership:
- As CEO, Ramesh Srinivasan provided strategic direction and leadership, guiding Agilysys through a period of significant growth and transformation.
- Financial Performance:
- Under Srinivasan’s leadership, Agilysys achieved strong financial performance, with notable increases in revenue, profitability, and market capitalization.
- Expansion of Product Portfolio:
- Srinivasan oversaw the expansion of Agilysys’ product portfolio through strategic acquisitions, including Visual One Systems, Eatec Corporation, and InfoGenesis, enhancing the company’s offerings for the hospitality and retail industries.
- Focus on Innovation:
- Srinivasan emphasized innovation, driving the development and launch of new cloud-based software platforms, mobile applications, and data analytics tools to meet the evolving needs of customers.
- Customer Success:
- Under Srinivasan’s leadership, Agilysys maintained a strong focus on customer success, delivering exceptional service and support to thousands of clients worldwide.
- Market Leadership:
- Through Srinivasan’s efforts, Agilysys solidified its position as a market leader in hospitality and retail technology solutions, gaining recognition for its innovation, reliability, and customer satisfaction.
- Expansion into New Markets:
- Srinivasan spearheaded Agilysys’ expansion into new markets, including international regions, diversifying the company’s revenue streams and broadening its global footprint.
- Culture of Excellence:
- Srinivasan fostered a culture of excellence and innovation within Agilysys, attracting top talent and empowering employees to drive the company’s success.
- Recognition and Awards:
- Under Srinivasan’s leadership, Agilysys received numerous industry awards and accolades for its products, services, and corporate performance, further solidifying its reputation as a leading technology provider.
➡️ Goal: All of our homework on this company leads up to the 4M Confidence Booster. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the business, the competition, and the management. If all 4Ms pass, we should have high confidence in buying this stock.
✅ MOS: Agilysys’s financials are good. A score of 50/100 meets our minimum requirements for the overall financial strength of the stock but the impressive number is the 90% MOS. If you take a closer look at the financials, the net income and EPS become profitable in 2022 and the stock hasn’t slowed down since.
✅ Meaning: The various revenue streams including POS, PMS, Professional services, transaction fees, hardware, and more make this a healthy business model. This gives Agilysys the ability to offer entry-level products and services to customers and then provide upsells to scale revenue.
✅ Moat: There are a few competitors in the hotel and resort industries but Agilysys has secured an impressive list of customers. Once you can gain bigger names and leverage data that shows results, it becomes a lot easier to secure other big names.
✅ Management: Ramesh Srinivasan has an impressive track record with Agilysys and even prior to Agilysys, he served in leadership roles at other tech companies including Ooyala, Innotrc, and Bally Technologies. It’s also important to highlight his Glassdoor CEO approval is 83% which shows people do respect his leadership and how he leads the company.
7. Is Agilysys stock a good buy?
This is a not-so-glamorous fly-under-the-radar stock that may be a good addition to your portfolio. Although the stock has returned -11% for the year, it has returned 340% over 5 years. I don’t see the travel industry slowing down any time soon which means hotels and resorts will continue building more properties. As new properties are built, Agilysis will continue to expand revenue.
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The Summary, Score, and MOS of this stock may have changed since the posting of this review. Please login to Tykr to see up-to-date information.
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