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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)

Rating:76Outperform
Price Target:
$134.00
▼(-2.04% Downside)
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 (FORTY) is a global technology company that specializes in software development, IT services, and technology consulting. The company operates primarily in the fields of enterprise software solutions, cloud computing, and mobile applications, catering to a diverse range of industries including healthcare, finance, and telecommunications. With a focus on innovation and digital transformation, Formula Systems offers a suite of products and services designed to enhance operational efficiency and drive business growth for its clients.
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
Positive
Last Price136.79
Price Trends
50DMA
125.06
Positive
100DMA
112.50
Positive
200DMA
101.36
Positive
Market Momentum
MACD
3.37
Negative
RSI
64.19
Neutral
STOCH
90.04
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 136.79 is above the 20-day moving average (MA) of 125.92, above the 50-day MA of 125.06, and above the 200-day MA of 101.36, indicating a bullish trend. The MACD of 3.37 indicates Negative momentum. The RSI at 64.19 is Neutral, neither overbought nor oversold. The STOCH value of 90.04 is Negative, 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 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
80
Outperform
$960.87M24.9914.04%2.87%11.98%14.91%
76
Outperform
$2.06B26.1911.46%1.43%9.16%16.38%
66
Neutral
$665.51M38.623.69%22.27%
64
Neutral
$3.75B-53.71%30.16%12.06%
63
Neutral
$1.48B516.340.37%7.40%-90.72%
61
Neutral
$35.52B8.84-11.06%1.87%8.55%-8.14%
51
Neutral
$1.74B-8.85%-43.28%15.29%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FORTY
Formula Systems
136.79
63.99
87.90%
MGIC
Magic
19.64
9.85
100.61%
VYX
NCR Voyix
13.31
0.95
7.69%
GDYN
Grid Dynamics Holdings
7.82
-6.41
-45.05%
APLD
Applied Digital Corporation
13.89
7.31
111.09%
NABL
N-able
7.90
-4.52
-36.39%
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