Last update on 2024-06-07

Agilysys (AGYS) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

Discover Agilysys' Piotroski F-Score of 6/9 for 2023, reflecting profitability, liquidity, and efficient operations.

Short Analysis - Piotroski Score: 6

We're running Agilysys (AGYS) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Agilysys (AGYS) has received a Piotroski F-Score of 6 out of 9, which evaluates profitability, liquidity, and operating efficiency. In terms of profitability, AGYS shows positive net income and cash flow, and the return on assets is increasing. For liquidity, there's a growing current ratio, though leverage has increased, which is an unfavorable sign. As for operating efficiency, the company scores points for higher operating cash flow compared to net income and improved asset turnover, but it falls short on gross margin and has diluted shares recently.

Insights for Value Investors Seeking Stable Income

Considering Agilysys (AGYS) has a Piotroski F-Score of 6, it indicates a moderately strong financial position. The company shows positive signs in profitability and operating efficiency, though some weaknesses exist in leverage and gross margin. It may be worth further research and consideration for investors, particularly if the management can address the areas of concern, but caution is advisable due to the recent increase in debt and share dilution.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Agilysys (AGYS)

Company has a positive net income?

The criterion examines whether the company has been able to achieve a positive net income in the latest fiscal year.

The net income for Agilysys (AGYS) in 2023 is $14,582,000, which is indeed positive. This indicates that the company has managed to generate profit. In terms of Piotroski scoring, this criterion earns Agilysys 1 point. Historically, over the past 20 years, Agilysys has had fluctuating net income, with significant losses in several years (e.g., -$42,078,000 in 2003 and -$55,475,000 in 2011). The positive income in 2023 is a favorable trend, reflecting better operational performance and possibly more effective cost management or a stronger revenue stream in recent years.

Company has a positive cash flow?

Evaluating the Cash Flow from Operations (CFO) to ensure it is positive is crucial as it reflects a company’s ability to generate sufficient revenue to maintain and grow operations.

The Cash Flow from Operations (CFO) for Agilysys (AGYS) in 2023 stands at $34,463,000. This is a positive value and indicates that the company is presently generating enough cash from its ongoing operational activities. Therefore, it earns 1 point for having a positive CFO. Analyzing the past 20 years of data reveals that while there have been periods of negative cash flow, recent years show a favourable trend with CFO being consistently positive since 2019. This trend is beneficial and signals improved operational efficiency and financial health.

Return on Assets (ROA) are growing?

Change in ROA measures the improvement in the company's profitability relative to its asset base.

For Agilysys (AGYS), the ROA increased significantly from 0.0321 in 2022 to 0.0638 in 2023. This improvement reflects a better utilization of the company's assets to generate earnings, which is a positive sign for investors. Compared to the Industry Median ROA, which ranged around 0.6741 in 2023, AGYS still lags, but the noticeable upward trend indicates progress and potential for future growth. Therefore, 1 point is added for the positive change in ROA.

Operating Cashflow are higher than Netincome?

Comparing operating cash flow with net income helps ascertain if a company is generating adequate real cash from operations.

For the fiscal year 2023, Agilysys (AGYS) has posted an operating cash flow of $34,463,000, significantly higher than its net income of $14,582,000. This comparison is vital because it tells us that Agilysys is effectively converting its earnings into cash, signifying strong liquidity. Reliable cash flow is an indicator of good financial health as it demonstrates the company's ability to fund its operations and invest in growth. Consequently, Agilysys scores 1 point for this criterion under the Piotroski analysis.

Liquidity of Agilysys (AGYS)

Leverage is declining?

Change in Leverage assesses a company's reliance on debt by examining its leverage ratio between two periods. Less reliance on debt indicates financial prudence.

For Agilysys (AGYS), the leverage ratio has increased from 0.0264 in 2022 to 0.0555 in 2023. This correlation suggests that Agilysys is incrementally adopting more debt financing, which could amplify financial risks. The historical data since 2003 illustrate fluctuating leverage, peaking at 0.3549 and reaching near zero multiple times. The sharp increment this year is a deviation from the downward trend observed previously. Currently, the leverage has risen, which sets the trend as unfavorable under this criterion, resulting in a score of 0.

Current Ratio is growing?

The criterion compares the current ratio over the last two years to ascertain any improvement in the company's liquidity.

The Current Ratio of Agilysys (AGYS) increased from 1.9054 in 2022 to 1.9698 in 2023. This increase suggests an enhancement in the company’s liquidity position, indicating a higher ability to cover short-term liabilities with short-term assets. Over the last two decades, AGYS had a fluctuating current ratio, peaking at 3.1913 in 2003 and hitting a low of 1.3455 in 2020. The current ratio of 1.9698 in 2023 also stands favorably against the industry median of 1.7519. This upward trend suggests a positive move, yielding 1 Piotroski point.

Number of shares not diluted?

The Change in Shares Outstanding criterion examines whether a company has been diluting shareholder value through the issuance of additional shares. Reducing shares outstanding can be an indicator of a commitment to increasing shareholder value.

For Agilysys (AGYS), the number of outstanding shares increased slightly from 24,357,000 in 2022 to 24,694,000 in 2023. This increase suggests that the company may have issued additional shares, which can sometimes be seen as dilutive to existing shareholders. Therefore, for the Piotroski Analysis, we add 0 points for this criterion. Over the past 20 years, the trend in shares outstanding has shown a fluctuating pattern, but there has been an overall reduction from the high of 37,489,981 shares in 2005 to the current level. While this long-term trend indicates efforts to manage shares outstanding, the recent increase is not a positive signal for this specific criterion.

Operating of Agilysys (AGYS)

Cross Margin is growing?

Change in Gross Margin measures the difference in gross margin between two periods.

Comparing the Gross Margin of Agilysys (AGYS) in 2023 and 2022, we find a slight decrease from 0.6243 in 2022 to 0.61 in 2023. This represents a decline, leading to a score of 0 points for this criterion according to the Piotroski F-Score model. Historically, the gross margin has seen some fluctuations over the last two decades. Notably, the gross margin reached a peak of 0.6515 in 2021 but declined thereafter. Despite the recent decline, AGYS' gross margin remains relatively high compared to its earlier years. Furthermore, the industry median gross margin for 2023 is 0.6741, which indicates that AGYS is below the industry median, suggesting room for improvement in operational efficiency.

Asset Turnover Ratio is growing?

Asset turnover measures a firm's efficiency in using its assets to generate sales.

The Asset Turnover increased from 0.8051 in 2022 to 0.8664 in 2023, indicating improved efficiency in asset utilization. Historically, AGYS's Asset Turnover peaked at 2.2098 in 2006, showing significant fluctuations over the years. However, the recent increase is a positive sign, awarding AGYS with 1 point for this criterion. Elevated ratios underscore refined operations and optimized resource usage, crucial for fostering sustainable financial health and investor trust.