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Formula Systems Ltd (FORTY)
NASDAQ:FORTY
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Formula Systems (FORTY) AI Stock Analysis

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FORTY

Formula Systems

(NASDAQ:FORTY)

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Outperform 76 (OpenAI - 4o)
Rating:76Outperform
Price Target:
$134.00
▲(3.08% Upside)
Formula Systems' overall stock score is driven primarily by its strong financial performance, which indicates robust growth and profitability. Technical analysis suggests a stable trend with potential buying opportunities due to oversold conditions. However, the high P/E ratio indicates potential overvaluation, which slightly offsets the positive financial outlook.

Formula Systems (FORTY) vs. SPDR S&P 500 ETF (SPY)

Formula Systems Business Overview & Revenue Model

Company DescriptionFormula 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 MoneyFormula Systems generates revenue through multiple key streams. Primarily, the company earns money by providing custom software development services, which include project-based work as well as ongoing maintenance and support contracts. Additionally, Formula Systems capitalizes on sales of its proprietary software products, licensing these solutions to organizations across various sectors. The company also benefits from consulting services, helping clients integrate technology solutions into their business operations. Significant partnerships with major tech firms further enhance its offerings and market reach, contributing to its 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
85
Very Positive
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
78
Positive
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
82
Very Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.81B2.76B2.62B2.57B2.41B1.93B
Gross Profit700.53M684.03M643.71M622.47M563.86M447.43M
EBITDA278.48M270.52M371.23M396.96M332.65M264.97M
Net Income81.83M79.67M64.01M201.47M141.40M112.49M
Balance Sheet
Total Assets3.05B3.01B2.81B2.79B2.75B2.52B
Cash, Cash Equivalents and Short-Term Investments526.79M563.20M528.17M569.06M512.46M533.15M
Total Debt626.94M644.21M669.99M772.67M712.91M668.54M
Total Liabilities1.67B1.63B1.50B1.62B1.57B1.41B
Stockholders Equity681.02M679.34M625.76M551.87M540.96M502.73M
Cash Flow
Free Cash Flow0.00295.49M262.97M199.82M177.42M258.13M
Operating Cash Flow0.00324.45M294.97M239.14M208.48M286.94M
Investing Cash Flow0.00-78.18M-139.24M-74.30M-110.19M-177.03M
Financing Cash Flow0.00-184.96M-243.18M-70.98M-114.13M9.73M

Formula Systems Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price130.00
Price Trends
50DMA
127.64
Positive
100DMA
119.97
Positive
200DMA
105.20
Positive
Market Momentum
MACD
1.17
Positive
RSI
47.12
Neutral
STOCH
28.76
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FORTY, the sentiment is Neutral. The current price of 130 is below the 20-day moving average (MA) of 135.96, above the 50-day MA of 127.64, and above the 200-day MA of 105.20, indicating a neutral trend. The MACD of 1.17 indicates Positive momentum. The RSI at 47.12 is Neutral, neither overbought nor oversold. The STOCH value of 28.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 0 New Risks

Formula Systems Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$2.06B26.3811.46%1.50%9.16%16.38%
73
Outperform
1.67B331.390.86%22.20%
71
Outperform
2.10B15.207.67%-6.31%-23.56%
69
Neutral
2.56B23.015.29%8.66%-35.78%
65
Neutral
2.51B6.8312.05%-4.93%497.03%
43
Neutral
2.36B-6.61-34.44%14.34%-13.27%
61
Neutral
$37.18B12.37-10.20%1.83%8.50%-7.62%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FORTY
Formula Systems
130.00
50.82
64.18%
ASGN
ASGN
47.87
-45.36
-48.65%
GLOB
Globant SA
58.01
-140.13
-70.72%
DXC
DXC Technology
14.01
-6.74
-32.48%
AI
C3ai
17.14
-7.09
-29.26%
FLYW
Flywire
13.62
-2.77
-16.90%

Formula Systems Corporate Events

Formula Systems Reports Record Revenue Growth in Q2 2025
Aug 19, 2025

On August 19, 2025, Formula Systems announced its financial results for the second quarter and first half of 2025, showing a significant increase in revenues by 11.3% year over year, reaching $743.4 million, marking a record high for the second quarter. Despite this revenue growth, net income attributable to shareholders decreased by 20.1% due to increased financial expenses caused by adverse exchange rate differences. The company declared a dividend for the second quarter, payable on October 28, 2025, and maintained compliance with all financial covenants under its debenture series.

Formula Systems Announces Acquisition of Sapiens by Advent
Aug 13, 2025

On August 13, 2025, Formula Systems announced that its subsidiary, Sapiens International Corporation, has entered into an agreement to be acquired by Advent, a global private equity investor, for $43.50 per share in cash, valuing Sapiens at approximately $2.5 billion. This transaction, which offers a significant premium to Sapiens’ recent share prices, will result in Sapiens becoming a privately held company, with Formula retaining a minority ownership. The acquisition is expected to accelerate Sapiens’ transition to AI and SaaS solutions, enhancing its offerings in the insurance technology sector.

Formula Systems Announces Special Shareholders Meeting for Director Elections
Jul 22, 2025

On July 21, 2025, Formula Systems announced a special general meeting of shareholders to be held on August 27, 2025, at their offices in Or Yehuda, Israel. The meeting’s agenda includes the election of Mr. Ilan Regev and Mr. Amir Hillman as external directors for a three-year term, with the approval of their compensation terms. This meeting is significant for stakeholders as it involves key decisions regarding the company’s leadership and governance structure.

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.Date of analysis: Aug 12, 2025