AGILYSYS INC (AGYS) stock intrinsic value fair value estimate & owner earnings analysis

Identity verified: the FY2026 10-K (acc. 0001193125-26-234423) filed under CIK 0000078749 is AGILYSYS, INC., a Delaware corporation headquartered in Alpharetta, GA, Nasdaq: AGYS, Commission File No. 000-05734, one reportable segment serving the global hospitality industry (hotel/resort/casino POS and PMS software). No going-concern language, no PRC/VIE/Cayman structure, no cannabis or crypto business, not a shell. Fiscal year actually ends March 31 (not January as commonly assumed). Owner Earnings (CFO - Capex - SBC) per diluted share, from 10-K/XBRL data, FY2020-FY2026: FY20 $0.08, FY21 -$0.56 (COVID hospitality collapse; also an SBC spike to $40.1M that year from award modifications/accelerated vesting, treated as a genuine cash-economics drag per Buffett's SBC-is-a-real-expense view), FY22 $0.50, FY23 $0.55, FY24 $0.97, FY25 $1.22, FY26 $1.63. The post-COVID recovery coincides with Agilysys' SaaS/subscription transition (subscription revenue +30% in FY26, +39% in FY25, aided by the Book4Time acquisition) which is lifting recurring-revenue mix and operating leverage, but SBC has also risen in absolute dollars ($21.8M in FY26, still fully deducted from owner earnings) alongside meaningful share-count dilution (23.2M to 28.4M diluted shares, FY18-FY26). Balance sheet is clean: $116.9M cash, effectively no debt at FY26 year-end (a $24M term loan drawn for the Book4Time deal in FY25 was repaid), giving ~$4.12/share net cash added to all three scenarios. Two-stage DCF from a $1.632 FY26 owner-earnings/share base: Bear assumes only 2%/yr growth (guarding against another hospitality-demand shock like FY21) at a 12% discount rate, 2% terminal growth, yielding ~$20.8/share. Base assumes 12%/yr growth for 10 years (materially moderated from the actual ~35-44% trailing 3-4yr OE/share CAGR, since that pace reflects a low base and one-time SaaS-transition margin lift rather than a sustainable steady state) at a 9.5% discount rate, 2.5% terminal growth, yielding ~$52.6/share. Bull assumes 18%/yr growth (still well below actual recent growth) at 8.5% discount, 2.5% terminal, yielding ~$95.3/share. The margin-of-safety price uses a wider-than-standard 35% discount to base ($34.17), justified by real SBC-driven dilution, hospitality-cycle/customer-concentration exposure, and premium-multiple risk typical of a small-cap SaaS transition story, partially offset by the strong net-cash cushion and now-demonstrated FCF conversion. Yahoo Finance current price $120.11 (intraday, 8/27/2026) sits above even the bull-case intrinsic value, implying the market is pricing in continued SaaS-driven growth well beyond what a conservative owner-earnings extrapolation supports. Data caveats: no PP&E-only capex tag was populated; capex used is the 'Payments to Acquire Productive Assets' line, confirmed against the FY26 cash flow statement as the actual 'Capital expenditures' line. Only bbase 10-K/XBRL data and Yahoo Finance (price only) were used; no third-party estimates or price targets were used.