12:41 PM EDT, 05/14/2024 (MT Newswires) -- Agilysys' ( AGYS ) better-than-expected subscription revenue growth guidance of 27% for fiscal year 2025 following its strong fiscal Q4 financial results suggests a "fast start," Oppenheimer said in a note Tuesday.

The company's "very solid" fiscal Q4 results were driven by record annual contract value, accelerating subscription revenue growth, and a 47% free cash flow margin, according to analysts.

Aside from these "impressive" results and the company's upbeat outlook for fiscal year 2025, the firm said it also expects a large inflection to Agilysys' ( AGYS ) subscription revenue growth in fiscal 2026 when cloud-native property management system software for Marriot International (MAR) goes live.

Product revenue, however, is declining and could impact margin improvements as customers prefer to use mobile devices instead of point-of-sale terminals, Oppenheimer said.

Agilysys' ( AGYS ) increased business momentum due to its fast subscription revenue and profitable growth still makes the company "a good growth compounder which should support multiples expansion," the note said.

Oppenheimer raised the price target on Agilysys ( AGYS ) to $100 from $95 and kept its outperform rating.

The company's shares were up nearly 14% in recent trading.

Price: 91.37, Change: +11.16, Percent Change: +13.91