Financial Analysis: Agilysys (AGYS) & Mattersight (MATR)

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Agilysys (NASDAQ: MATR) and Mattersight (NASDAQ:MATR) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitability.

Institutional and Insider Ownership

86.3% of Agilysys shares are owned by institutional investors. Comparatively, 37.6% of Mattersight shares are owned by institutional investors. 26.8% of Agilysys shares are owned by company insiders. Comparatively, 28.3% of Mattersight shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Agilysys and Mattersight, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Agilysys 0 0 1 0 3.00
Mattersight 0 3 0 0 2.00

Agilysys presently has a consensus target price of $22.00, indicating a potential upside of 43.51%. Mattersight has a consensus target price of $3.04, indicating a potential upside of 13.25%. Given Agilysys’ stronger consensus rating and higher probable upside, equities analysts clearly believe Agilysys is more favorable than Mattersight.

Valuation and Earnings

This table compares Agilysys and Mattersight’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Agilysys $127.36 million 2.83 -$8.35 million ($0.37) -41.43
Mattersight $46.51 million 1.91 -$16.32 million N/A N/A

Agilysys has higher revenue and earnings than Mattersight.

Risk & Volatility

Agilysys has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500. Comparatively, Mattersight has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500.

Profitability

This table compares Agilysys and Mattersight’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Agilysys -5.59% -6.54% -4.52%
Mattersight -22.26% N/A -29.58%

Summary

Agilysys beats Mattersight on 9 of the 11 factors compared between the two stocks.

Agilysys Company Profile

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, the Asia-Pacific, and India. The company offers point-of-sale, property management, reservation and table management, inventory and procurement, workforce management, analytics, document management, and mobile and wireless solutions to streamline operations, and enhance efficiency and guest experience. It also provides support and maintenance of software and hardware products, and subscription services; and professional services. Agilysys, Inc. 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 headquartered in Alpharetta, Georgia.

Mattersight Company Profile

Mattersight Corporation provides behavioral analytics services in the United States. The company provides predictive behavioral routing and workstyle, performance management, quality assurance, predictive analytics, and marketing managed services. It serves companies in the healthcare, insurance, financial service, technology, telecommunication, cable, utility, education, hospitality, and government industries. The company was formerly known as eLoyalty Corporation and changed its name to Mattersight Corporation in May 2011. Mattersight Corporation was founded in 1994 and is headquartered in Chicago, Illinois.

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