By Kit Norton

Artificial intelligence hasn't killed software just yet.

Shares of Agilysys, a hospitality software provider, surged 15% to $80.41 on Tuesday, on pace for its best day since Oct. 28, 2025, according to Dow Jones Market Data.

Investors propelled Agilysys shares higher as they digested the software company's latest results, reported late Monday. For fiscal fourth quarter ending in March, earnings surpassed Wall Street expectations, and the company notched its 17th consecutive quarter of record revenue, driven by subscription sales growth of 24%.

Agilysys also forecast fiscal 2027 revenue between $365 million and $370 million, above the $363.59 million that analysts were expecting. The company expects full-year subscription revenue growth of "at least" 30%, which would mark the third straight year of rising subscriptions.

The key behind Agilysys' solid results and big stock move is the robust subscription sales growth, which flies in the face of the broad market sentiment that AI will make software obsolete. Agilysys shares cratered earlier this year amid the AI-driven software selloff.

Oppenheimer analyst Brian Schwartz on Tuesday raised his Agilysys price target to $100 from $90, maintaining an Outperform rating on the stock. That price target represents 24% upside compared with current trading levels and would return shares to around their levels before the big software selloff in January.

The business has begun a "noticeable uptrend" in calendar year 2026 and that "should continue throughout" fiscal 2027, Schwartz wrote.

"If the company keeps beating-and-guiding above, similar to F4Q26, then the stock should keep working," Schwartz added.

Similarly, BTIG analysts Allan Verkhovski and Nick Dannewitz wrote that Tuesday's stock move was almost entirely due to management's "impressive" fiscal 2027 guidance for subscription revenue growth.

"We continue to like the story, though we are looking for a better entry point," the analysts wrote. They have a Neutral rating on the stock, with no price target.

Wall Street is also betting on the company's agreement with Marriott International to deliver its cloud-native property management system, or PMS, software across the hotel chain's luxury, premium, and selective service properties in the U.S. and Canada.

While the deal was first announced in late 2022, Oppenheimer's Schwartz says full-year guidance implies it should "start contributing more meaningfully" to the company's financials.

"The Marriott PMS project continues to make good progress and is on plan, " CEO Ramesh Srinivasan said on Monday's earnings call.

Meanwhile, the BTIG team's base case assumes subscription revenue growth of 23%, 22%, and 20% in fiscal 2027, fiscal 2028, and fiscal 2029, respectively. The Marriott contribution will add an additional 7%, 11%, and 9%, respectively, to Agilysys subscription growth, according to BTIG.

Write to Kit Norton at kit.norton@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

May 19, 2026 12:22 ET (16:22 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.