Formula Systems (FORTY) AI Stock Analysis

• Market Cap: $1.36B
• Dividend Yield: 0.96%
• Average Volume (3M): 1.03K
• Price to Earnings (P/E): 16.8
• Beta (1Y): 0.76
• Revenue Growth: 3.51%
• EPS Growth: 18.34%
• Country: US
• Employees: 21,900
• Sector: Technology
• Sector Strength: 57
• Industry: Information Technology Services
• EPS (TTM): 1.31
• Shares Outstanding: 15,332,667
• 10 Day Avg. Volume: 1,240
• 30 Day Avg. Volume: 1,027
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.55
• Price to Cash Flow (P/CF): N/A
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

Formula Systems scores well on financial performance due to its revenue growth and strong cash flow, though there is a need to address profitability. Technical indicators suggest positive momentum, but valuation metrics indicate the stock is fairly priced without significant upside potential. The lack of earnings call and corporate events information limits further insights. The overall stock score reflects a stable but cautious outlook.

Formula Systems Business Overview & Revenue Model

Company Description

Formula Systems (1985) Ltd., through its subsidiaries, provides proprietary and non-proprietary software solutions, IT professional services, software product marketing and support, and computer infrastructure and integration solutions worldwide. The company offers computer and telecommunication infrastructure solutions; computer solutions to computer and communications infrastructures; cloud computing solutions; and database and big data services. It also provides customer relations management, computer systems management infrastructures, web world content management, database and data warehouse mining, application integration, database and system, data management, and software development tools; and professional training courses and advanced professional studies. In addition, it markets and sells computers and peripheral equipment to business customers; offers property and casualty insurance platforms, such as Sapiens, Sapiens CoreSuite, Sapiens IDITSuite, Sapiens PolicyPro, Sapiens BillingPro, Sapiens ClaimsPro, e-Tica, and Tia Enterprise; life, pension, and annuities platforms, including Sapiens CoreSuite, Sapiens UnderwritingPro, Sapiens ApplicationPro, Sapiens IllustrationPro, and Sapiens ConsolidationMaster; reinsurance software solutions comprising Sapiens ReinsuranceMaster, Sapiens ReinsurancePro, and Sapiens Reinsurance GO; and Sapiens platform for workers' compensation solutions. Further, the company provides financial and compliance solutions that include Sapiens FinancialPro, Sapiens Financial GO, and Sapiens StatementPro; Sapiens DECISION, a decision management platform; and technology-based solutions. Additionally, it offers application development and business process integration platforms; vertical software solutions; strategic consulting and outsourcing services; and professional services in various areas, as well as develops on-premise payroll software. Formula Systems (1985) Ltd. was incorporated in 1985 and is headquartered in Or Yehuda, Israel.

How the Company Makes Money

Formula Systems makes money primarily through the provision of IT services, including software development, IT consulting, and systems integration. The company leverages its subsidiaries, which specialize in different areas of IT and software solutions, to deliver comprehensive services to its clients. Revenue is generated through long-term service contracts, software licensing fees, and consulting engagements. Significant partnerships with key technology providers and a diverse client base across multiple industries contribute to its financial performance.

Formula Systems Financial Statement Overview

Summary

Formula Systems shows solid revenue growth and efficient cash flow generation, but the recent decline in net income is a concern. The balance sheet reflects a stable financial position with moderate leverage. Overall, the company is financially healthy but should focus on improving profitability.

Income Statement

Formula Systems has demonstrated consistent revenue growth over the years, with a slight increase in 2023. However, the net profit margin decreased significantly in 2023 due to a drop in net income. The EBIT and EBITDA margins are relatively healthy, indicating strong operating performance, but the decline in net income is a concern.

Balance Sheet

The company maintains a moderate debt-to-equity ratio, indicating manageable leverage. The return on equity is lower than previous years, reflecting reduced profitability. Equity represents a fair portion of the total assets, which suggests a stable capital structure.

Cash Flow

Free cash flow has shown consistent growth, supporting the company's financial flexibility. Operating cash flow to net income ratio is strong, indicating effective cash conversion from earnings. The free cash flow to net income ratio is also robust, underscoring the company's ability to generate cash relative to net income.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
2.71B	2.62B	2.57B	2.41B	1.93B	1.70B
	Gross Profit
664.78M	643.71M	622.47M	563.86M	447.43M	386.05M
	EBIT
259.00M	239.37M	276.64M	85.83M	75.13M	51.56M
	EBITDA
260.33M	371.23M	396.96M	332.65M	264.97M	228.15M
	Net Income Common Stockholders
75.33M	64.01M	201.47M	141.40M	112.49M	92.64M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
107.69M	528.17M	569.06M	512.46M	533.15M	405.53M
	Total Assets
671.83M	2.81B	2.79B	2.75B	2.52B	2.09B
	Total Debt
46.72M	669.99M	772.67M	712.91M	668.54M	603.49M
	Net Debt
-41.45M	218.04M	228.33M	227.52M	166.91M	234.45M
	Total Liabilities
305.54M	1.50B	1.62B	1.57B	1.41B	1.19B
	Stockholders Equity
221.28M	625.76M	551.87M	540.96M	502.73M	421.64M
Cash Flow		Free Cash Flow
0.00	262.97M	199.82M	177.42M	258.13M	159.50M
	Operating Cash Flow
0.00	294.97M	239.14M	208.48M	286.94M	196.08M
	Investing Cash Flow
0.00	-139.24M	-74.30M	-110.19M	-177.03M	-108.22M
	Financing Cash Flow
0.00	-243.18M	-70.98M	-114.13M	9.73M	6.01M

Formula Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 92.62
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FORTY, the sentiment is Positive. The current price of 92.62 is above the 20-day moving average (MA) of 87.53, above the 50-day MA of 92.23, and above the 200-day MA of 85.07, indicating a bullish trend. The MACD of -0.75 indicates Negative momentum. The RSI at 57.82 is Neutral, neither overbought nor oversold. The STOCH value of 93.53 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FORTY.

Formula Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MGIC	80 Outperform	$681.50M	18.20	13.58%	3.22%	3.26%	-0.41%
FORTY	71 Outperform	$1.36B	16.77	12.21%	0.96%	3.51%	18.34%
NABL	68 Neutral	$1.27B	40.67	4.21%	―	10.49%	30.42%
GDYN	63 Neutral	$1.17B	305.90	0.90%	―	12.04%	―
Sector *	59 Neutral	$10.74B	10.21	-6.69%	3.04%	7.44%	-10.92%
VYX	43 Neutral	$1.18B	―	-20.40%	―	-54.34%	-34.10%
APLD	37 Underperform	$1.18B	―	-78.94%	―	53.70%	-72.91%