Analyzing Agilysys (AGYS) & Quality Systems (QSII)

Agilysys (NASDAQ: AGYS) and Quality Systems (NASDAQ:QSII) are both small-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, risk, dividends and analyst recommendations.

Insider and Institutional Ownership

85.9% of Agilysys shares are owned by institutional investors. Comparatively, 70.3% of Quality Systems shares are owned by institutional investors. 34.7% of Agilysys shares are owned by company insiders. Comparatively, 17.9% of Quality Systems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Agilysys and Quality Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Agilysys 0 0 0 0 N/A
Quality Systems 4 5 1 0 1.70

Quality Systems has a consensus price target of $15.94, suggesting a potential downside of 9.96%. Given Quality Systems’ higher probable upside, analysts plainly believe Quality Systems is more favorable than Agilysys.

Profitability

This table compares Agilysys and Quality Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Agilysys -6.56% -7.63% -5.28%
Quality Systems 0.46% 10.88% 6.97%

Earnings and Valuation

This table compares Agilysys and Quality Systems’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Agilysys $127.36 million 2.63 -$8.35 million ($0.37) -38.95
Quality Systems $531.02 million 2.13 $2.42 million $0.57 31.05

Quality Systems has higher revenue and earnings than Agilysys. Agilysys is trading at a lower price-to-earnings ratio than Quality Systems, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Agilysys has a beta of 0.35, suggesting that its share price is 65% less volatile than the S&P 500. Comparatively, Quality Systems has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500.

Summary

Quality Systems beats Agilysys on 10 of the 13 factors compared between the two stocks.

About Agilysys

Agilysys, Inc., together with its subsidiaries, operates as a developer and marketer of hardware and software products and services to the hospitality industry in North America, Europe, and Asia. It specializes in point-of-sale, property management, inventory and procurement, workforce management, and mobile and wireless solutions that are designed to streamline operations, enhance efficiency, increasing guest recruitment and wallet share, and enhance the overall guest experience. The company also offers support and maintenance of software and hardware products, and subscription services; and professional services. It serves various sectors, including gaming; hotels, resorts, and cruise; foodservice management; and restaurants, universities, stadia, and healthcare. The company was formerly known as Pioneer-Standard Electronics, Inc. and changed its name to Agilysys, Inc. in 2003. Agilysys, Inc. was founded in 1963 and is based in Alpharetta, Georgia.

About Quality Systems

Quality Systems, Inc., together with its subsidiaries, develops and markets software and services that automate various aspects of practice management (PM) and electronic health records for medical and dental practices in the United States. The company's NextGen division provides integrated clinical, financial, and connectivity solutions for ambulatory and dental provider organizations. Its principal products include the NextGen Ambulatory product suite; interoperability solutions; and MediTouch, a cloud-based software suite comprising clearinghouse, PM, electronic health records, and patient portals, which enable mobility, workflow automation, and reporting and analytics. Its RCM Services Division offers technology-based solutions that are designed to optimize clients' revenue cycle costs and process efficiency, as well as to enhance clients' cash flow. This division provides revenue cycle management optimization services; and billing and collections, claims submissions and reconciliation, electronic remittance and payment posting, accounts receivable management, patient client service, advance analytics, charge entry and capture, enrollment credentialing, and software setup, hosting, and support services. The company's QSI Dental division focuses on developing, marketing, and supporting software suites for dental group organizations. This division also offers QSIDental Web, a cloud-based and software as a service and PM clinical software solution; and sells licenses to its products. The company also provides software implementation, training, support, and maintenance services; and electronic data interchange services. It serves single and small practice physicians, physician hospital organizations, management service organizations, accountable care organizations, ambulatory care centers, community health centers, and medical and dental schools through a sales force and a reseller channel. The company was founded in 1974 and is headquartered in Irvine, California.

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