Formula Systems Ltd (FORTY)
NASDAQ:FORTY
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Formula Systems
(NASDAQ:FORTY)
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Rating:71Outperform
Price Target:
$115.00
▼(-31.52% Downside)
Action:Reiterated
Date:05/17/26
The score is driven mainly by solid cash-flow strength and a materially improved balance sheet, alongside very attractive valuation metrics (very low P/E and a moderate dividend yield). The key risks holding the score back are 2025 revenue and margin weakness and the apparent non-recurring nature of the net income spike, while technical signals are mixed and do not add strong support.
Positive Factors
Strong cash generation
Formula exhibits durable cash-generation: operating cash flow and free cash flow materially increased in 2025 and track reported earnings closely. This strengthens the company’s ability to fund operations, reinvest in subsidiaries, and support shareholder returns without relying on external financing.
Negative Factors
2025 revenue and margin pressure
A 2025 revenue decline and compressed gross/operating margins weaken operating leverage and limit cash flow scalability. If these trends persist they could constrain reinvestment in subsidiaries, reduce margin resilience in project-driven services, and impair sustainable profit growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Formula exhibits durable cash-generation: operating cash flow and free cash flow materially increased in 2025 and track reported earnings closely. This strengthens the company’s ability to fund operations, reinvest in subsidiaries, and support shareholder returns without relying on external financing.
Read all positive factors
Formula Systems (FORTY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.51B
Dividend Yield0.8%
Average Volume (3M)413.00
Price to Earnings (P/E)2.4
Beta (1Y)0.71
Revenue Growth3.31%
EPS Growth665.00%
CountryUS
Employees21,900
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)39.46
Shares Outstanding15,334,667
10 Day Avg. Volume462
30 Day Avg. Volume413
Financial Highlights & Ratios
PEG Ratio-1.40
Price to Book (P/B)1.89
Price to Sales (P/S)0.97
P/FCF Ratio6.82
Enterprise Value/Market Cap0.81
Enterprise Value/Revenue0.44
Enterprise Value/Gross Profit2.09
Enterprise Value/Ebitda3.40
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Formula Systems Business Overview & Revenue Model
Company Description
Formula Systems (1985) Ltd. is a global provider of diverse IT solutions and services, operating through its various subsidiaries. The company specializes in delivering both its own proprietary software and third-party solutions, alongside compreh...
How the Company Makes Money
Formula Systems makes money primarily through the operating revenues of its majority-owned and affiliated subsidiaries rather than by selling products directly at the holding-company level. The group’s revenue model is largely services- and projec...
Formula Systems Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
66
Positive
Cash Flow
74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.65B | 2.76B | 2.62B | 2.57B | 2.41B |
| Gross Profit | 451.39M | 684.03M | 643.71M | 622.47M | 563.86M |
| EBITDA | 342.36M | 386.02M | 371.23M | 396.96M | 332.65M |
| Net Income | 28.39M | 79.67M | 64.01M | 81.39M | 54.59M |
Balance Sheet | |||||
| Total Assets | 3.58B | 3.01B | 2.81B | 2.79B | 2.75B |
| Cash, Cash Equivalents and Short-Term Investments | 1.28B | 563.20M | 528.17M | 569.06M | 512.46M |
| Total Debt | 592.25M | 689.45M | 669.99M | 772.67M | 712.91M |
| Total Liabilities | 1.81B | 1.63B | 1.50B | 1.62B | 1.57B |
| Stockholders Equity | 1.35B | 679.34M | 625.76M | 551.87M | 540.96M |
Cash Flow | |||||
| Free Cash Flow | 374.82M | 295.49M | 262.97M | 199.82M | 177.42M |
| Operating Cash Flow | 391.13M | 324.45M | 294.97M | 239.14M | 208.48M |
| Investing Cash Flow | 539.25M | -78.18M | -139.24M | -74.30M | -110.19M |
| Financing Cash Flow | -202.07M | -184.96M | -243.18M | -70.98M | -114.13M |
Formula Systems Technical Analysis
Negative
167.92
Price Trends
126.60
Negative
121.85
Negative
133.17
Negative
Market Momentum
-6.41
Positive
29.49
Positive
8.87
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FORTY, the sentiment is Negative. The current price of 167.92 is above the 20-day moving average (MA) of 120.73, above the 50-day MA of 126.60, and above the 200-day MA of 133.17, indicating a bearish trend. The MACD of -6.41 indicates Positive momentum. The RSI at 29.49 is Positive, neither overbought nor oversold. The STOCH value of 8.87 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FORTY.
Formula Systems Risk Analysis
Formula Systems disclosed 52 risk factors in its most recent earnings report. Formula Systems reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
We may encounter difficulties in realizing the potential financial or strategic benefits of recent business acquisitions. We expect to make additional acquisitions in the future that could disrupt our operations and harm our operating results. Q4, 2023
2.
Our business depends on generating and maintaining ongoing, profitable client demand for our services and solutions, including through the adaptation and expansion of our services and solutions in response to ongoing changes in technology and offerings, and a significant reduction in such demand or an inability to respond to the evolving technological environment could materially affect our results of operations. Q4, 2023
3.
Political and economic conditions in Israel, including the ongoing war and hostilities between Israel and Hamas Terror Organization and Israel and the Hezbollah Terror Organization in Lebanon, may limit our ability to sell our products. This could have a material adverse effect on our operations and business condition, harm our results of operations and adversely affect our share price. Q4, 2023
Formula Systems Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $2.16B | 72.54 | 3.65% | ― | 32.49% | 539.48% | |
71 Outperform | $1.51B | 2.40 | 59.52% | 0.80% | 3.31% | 665.00% | |
67 Neutral | $1.30B | 12.08 | 5.14% | ― | -0.20% | -28.17% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
50 Neutral | $1.38B | -2.66 | -63.91% | ― | -35.67% | -49.96% | |
46 Neutral | $1.43B | 89.73 | 0.58% | ― | -1.76% | -96.67% |
* Technology Sector Average
FORTY
Formula Systems
99.00
-13.54
-12.03%
GLOB
Globant SA
30.03
-61.10
-67.05%
DXC
DXC Technology
8.82
-6.21
-41.32%
AI
C3ai
8.90
-15.34
-63.28%
FLYW
Flywire
17.54
6.13
53.72%
Formula Systems Corporate Events
Formula Systems Sets July 20, 2026 Date for Annual Shareholder Meeting
Jun 15, 2026
Formula Systems (1985) Ltd. has convened its 2026 annual general meeting of shareholders for July 20, 2026, at its offices in Or Yehuda, Israel, with the record date for voting set as June 17, 2026. Shareholders of ordinary shares and ADSs will be...
Formula Systems Posts Record Q1 2026 Results, Completes Matrix–Magic Merger and Declares $200 Million Special Dividend
May 28, 2026
On May 28, 2026, Formula Systems reported record first-quarter results for the period ended March 31, 2026, with revenue up 19.2% year over year to $738.3 million and net income attributable to shareholders rising 84.5% to an all-time quarterly hi...
Formula Systems Announces $200 Million Special Dividend on 2025 Results
May 14, 2026
On May 14, 2026, Formula Systems said its board had approved a special cash dividend of $13.045 per share, totaling about $200 million, based on its 2025 results and boosted by the completion of Advent’s acquisition of Sapiens. The dividend,...
Formula Systems Posts Record 2025 Profit on Sapiens Sale and Strong Revenue Growth
Mar 26, 2026
On March 26, 2026, Formula Systems reported its fourth-quarter and full-year 2025 results, highlighted by the December 17, 2025 completion of the sale of control in subsidiary Sapiens International to Advent, after shareholder approval on November...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.