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Formula Systems (FORTY)
:FORTY
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Formula Systems
(NASDAQ:FORTY)
Rating:71Outperform
Price Target:―
Formula Systems (FORTY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.54B
Dividend Yield1.19%
Average Volume (3M)400.00
Price to Earnings (P/E)18.2
Beta (1Y)0.80
Revenue Growth3.51%
EPS Growth18.34%
CountryUS
Employees21,900
SectorTechnology
Sector Strength78
IndustryInformation Technology Services
Share Statistics
EPS (TTM)1.26
Shares Outstanding15,332,667
10 Day Avg. Volume222
30 Day Avg. Volume400
Financial Highlights & Ratios
PEG Ratio1.54
Price to Book (P/B)2.07
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
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 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.75
Positive
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.70
Positive
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.80
Positive
| 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
Positive
97.50
Price Trends
91.71
Positive
91.51
Positive
86.22
Positive
Market Momentum
3.21
Negative
53.06
Neutral
21.00
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 97.5 is above the 20-day moving average (MA) of 95.80, above the 50-day MA of 91.71, and above the 200-day MA of 86.22, indicating a bullish trend. The MACD of 3.21 indicates Negative momentum. The RSI at 53.06 is Neutral, neither overbought nor oversold. The STOCH value of 21.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $741.89M | 19.75 | 13.87% | 3.73% | 8.75% | 5.17% | |
72 Outperform | $1.46B | 88.63 | 2.20% | ― | 7.98% | -40.59% | |
71 Outperform | $1.54B | 18.24 | 12.47% | 1.19% | 3.51% | 18.34% | |
66 Neutral | $1.09B | 98.17 | 2.42% | ― | 18.72% | 347.70% | |
61 Neutral | $11.28B | 10.16 | -6.88% | 2.97% | 7.41% | -8.93% | |
54 Neutral | $1.49B | ― | -19.49% | ― | -50.48% | -15.75% | |
40 Underperform | $1.65B | ― | -78.94% | ― | 53.70% | -72.91% |
* Technology Sector Average
Performance Comparison
FORTY
Formula Systems
97.50
17.63
22.07%
MGIC
Magic
15.11
4.88
47.70%
VYX
NCR Voyix
10.82
-2.49
-18.71%
GDYN
Grid Dynamics Holdings
12.84
2.64
25.88%
APLD
Applied Digital Corporation
7.36
2.74
59.31%
NABL
N-able
7.72
-4.90
-38.83%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.