Formula Systems (FORTY) AI Stock Analysis

• Market Cap: $1.92B
• Dividend Yield: 1.54%
• Average Volume (3M): 501.00
• Price to Earnings (P/E): 23.8
• Beta (1Y): 0.89
• Revenue Growth: 6.22%
• EPS Growth: 24.91%
• Country: US
• Employees: 21,900
• Sector: Technology
• Sector Strength: 92
• Industry: Information Technology Services
• EPS (TTM): 1.26
• Shares Outstanding: 15,332,667
• 10 Day Avg. Volume: 865
• 30 Day Avg. Volume: 501
• PEG Ratio: 8.91
• Price to Book (P/B): 2.88
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 0.19
• Enterprise Value/Gross Profit: 3.04
• Enterprise Value/Ebitda: 2.02
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 74 Outperform
• Price Target: $147.00 ▲(19.03%Upside)

Formula Systems shows strong financial performance and positive technical indicators, suggesting a robust growth trajectory. However, overbought technical signals could lead to short-term volatility. The valuation metrics indicate a premium price with modest dividend yield, which might limit appeal for value-oriented investors.

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 through multiple revenue streams, primarily from the sale of software products, IT services, and consulting. The company generates income by developing and licensing proprietary software solutions tailored to specific industry needs, providing IT outsourcing services, and offering consulting expertise to optimize clients' technology operations. Additionally, Formula Systems benefits from strategic partnerships and collaborations with leading technology providers, which help to expand its market reach and enhance its service offerings, contributing to the company's overall earnings.

Formula Systems Financial Statement Overview

Summary

Formula Systems demonstrates strong financial health across key metrics. The company exhibits robust growth and profitability, with well-managed leverage and efficient cash flow utilization. While the balance sheet is solid, enhancing the equity ratio could further strengthen financial resilience. Overall, the company is on a positive trajectory with sound financial foundations.

Income Statement

The income statement reflects solid growth and profitability. Over the past year, revenue grew by 5.2%, indicating a positive growth trajectory. Gross profit margin stands at 24.8%, and net profit margin improved to 2.9%, showcasing efficient cost management. Both EBIT and EBITDA margins are healthy at 9.6% and 9.8%, respectively, demonstrating strong operational performance.

Balance Sheet

The balance sheet is stable with a debt-to-equity ratio of 0.95, reflecting a balanced leverage position. Return on equity is reasonable at 11.7%, indicating effective use of equity. The equity ratio is 22.5%, showing a solid equity base relative to total assets. These metrics suggest a well-managed capital structure, though there is room for improvement in equity ratio.

Cash Flow

Cash flow analysis shows robust free cash flow growth of 12.4% year-over-year. The operating cash flow to net income ratio is 4.1, indicating strong cash generation relative to net income. Similarly, the free cash flow to net income ratio is 3.7, underscoring efficient cash utilization. These metrics highlight effective cash management and operational efficiency.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.76B	2.62B	2.57B	2.41B	1.93B
Gross Profit	684.03M	643.71M	622.47M	563.86M	447.43M
EBITDA	270.52M	371.23M	396.96M	332.65M	264.97M
Net Income	79.67M	64.01M	201.47M	141.40M	112.49M
Balance Sheet
Total Assets	3.01B	2.81B	2.79B	2.75B	2.52B
Cash, Cash Equivalents and Short-Term Investments	575.21M	528.17M	569.06M	512.46M	533.15M
Total Debt	644.21M	669.99M	772.67M	712.91M	668.54M
Total Liabilities	1.63B	1.50B	1.62B	1.57B	1.41B
Stockholders Equity	679.34M	625.76M	551.87M	540.96M	502.73M
Cash Flow
Free Cash Flow	295.49M	262.97M	199.82M	177.42M	258.13M
Operating Cash Flow	324.45M	294.97M	239.14M	208.48M	286.94M
Investing Cash Flow	-78.18M	-139.24M	-74.30M	-110.19M	-177.03M
Financing Cash Flow	-184.96M	-243.18M	-70.98M	-114.13M	9.73M

Formula Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 123.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 123.5 is below the 20-day moving average (MA) of 128.83, above the 50-day MA of 116.30, and above the 200-day MA of 95.27, indicating a neutral trend. The MACD of 3.19 indicates Positive momentum. The RSI at 54.90 is Neutral, neither overbought nor oversold. The STOCH value of 57.19 is Neutral, 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
FORTY	74 Outperform	$1.92B	23.76	12.47%	1.54%	6.22%	24.91%
MGIC	73 Outperform	$1.05B	27.98	13.87%	2.63%	8.75%	5.17%
NABL	73 Outperform	$1.55B	94.26	2.20%	―	7.98%	-40.59%
GDYN	66 Neutral	$884.37M	79.97	2.42%	―	18.72%	347.70%
Sector *	63 Neutral	£505.30M	23.90	-8.45%	170.40%	4.53%	-18.72%
VYX	57 Neutral	$1.98B	―	-19.49%	―	-50.48%	-15.75%
APLD	57 Neutral	$2.42B	―	-78.94%	―	53.70%	-72.91%