Formula (FORTY) AI Stock Analysis

• Market Cap: 8.72B
• Dividend Yield: 2.63%
• Average Volume (3M): 15.46K
• Price to Earnings (P/E): 34.0
• Beta (1Y): 1.35
• Revenue Growth: 1.94%
• EPS Growth: -8.81%
• Country: IL
• Employees: 21,900
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 380.60
• Shares Outstanding: 15,332,667
• 10 Day Avg. Volume: 14,660
• 30 Day Avg. Volume: 15,457
• PEG Ratio: 0.60
• Price to Book (P/B): 1.89
• Price to Sales (P/S): 0.47
• P/FCF Ratio: 4.35
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: 59,534.00 ▲(4.67% Upside)

The overall stock score of 73.1 reflects strong financial performance and positive technical momentum, despite a high valuation. The company's robust revenue growth and stable margins are significant strengths. However, the overbought technical indicators and high P/E ratio suggest caution in the short term.

Positive Factors

Revenue Growth

The significant year-over-year revenue growth indicates strong market demand and effective business strategies, supporting long-term expansion.

Cash Generation

Strong free cash flow growth enhances financial flexibility, enabling investments in innovation and strategic initiatives, bolstering long-term competitiveness.

Market Position

Leadership in key technology areas strengthens competitive positioning, ensuring sustained relevance and customer value in a rapidly evolving industry.

Negative Factors

Declining ROE

The decline in ROE suggests potential inefficiencies in generating profits from equity, which could impact investor confidence and long-term growth prospects.

Net Profit Margin

The slight improvement in net profit margin indicates challenges in cost control and efficiency, potentially limiting profitability and competitive edge.

Earnings Volatility

Negative EPS growth reflects earnings volatility, which may hinder investor confidence and affect the company's ability to sustain long-term growth.

Formula Business Overview & Revenue Model

Company Description

Formula (FORTY) is an innovative technology company specializing in advanced software solutions and digital transformation services. Operating primarily in the tech sector, Formula focuses on developing cutting-edge applications and platforms that enhance business efficiency and productivity. Their core products include cloud-based software, analytics tools, and customized digital solutions tailored to meet the diverse needs of various industries, including finance, healthcare, and logistics.

How the Company Makes Money

Formula generates revenue through multiple channels, including subscription-based models for its software products, where clients pay recurring fees for access to their platforms and updates. Additionally, the company earns income from consulting services, helping businesses implement and optimize their digital solutions. Key revenue streams also include one-time fees for bespoke software development projects and maintenance contracts for ongoing support. Significant partnerships with industry leaders and technology providers enhance Formula's offerings, enabling them to bundle services and create comprehensive solutions that attract a broader client base, thus contributing to their overall earnings.

Formula Financial Statement Overview

Summary

Formula has demonstrated robust financial health with consistent revenue growth, stable margins, and improved leverage. The company has effectively managed its cash flows, supporting its operational and strategic initiatives. While ROE has fluctuated, the overall financial trajectory remains positive, positioning the company well within the Information Technology Services industry.

Income Statement

The company has demonstrated consistent revenue growth, with a notable increase from $1.93 billion in 2020 to $2.76 billion in 2024. Gross profit margin has remained stable, averaging around 24.8% over the years. Net profit margin improved slightly from 3.9% in 2020 to 2.9% in 2024, indicating controlled costs and efficient operations. EBIT and EBITDA margins have shown positive trends, reflecting strong operational performance.

Balance Sheet

The balance sheet shows a stable financial position with a debt-to-equity ratio decreasing from 1.43 in 2020 to 0.95 in 2024, indicating improved leverage management. Return on equity (ROE) has been volatile, peaking at 36.5% in 2022 but declining to 11.7% in 2024. The equity ratio has improved, suggesting a stronger equity base relative to total assets.

Cash Flow

The company has shown strong free cash flow growth, with free cash flow increasing from $159.5 million in 2019 to $295.5 million in 2024. Operating cash flow to net income ratio has been consistently above 1, indicating healthy cash generation relative to net income. Free cash flow to net income ratio also reflects efficient cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.89B	2.76B	2.62B	2.57B	2.41B	1.93B
Gross Profit	683.03M	684.68M	643.71M	622.47M	563.86M	447.43M
EBITDA	282.02M	391.80M	362.53M	390.45M	324.26M	258.04M
Net Income	71.75M	79.67M	64.01M	201.47M	141.40M	112.49M
Balance Sheet
Total Assets	3.33B	3.01B	2.81B	2.79B	2.75B	2.52B
Cash, Cash Equivalents and Short-Term Investments	432.08M	563.20M	528.17M	569.06M	512.46M	533.15M
Total Debt	638.70M	644.21M	669.99M	772.67M	712.91M	668.54M
Total Liabilities	1.75B	1.63B	1.50B	1.62B	1.57B	1.41B
Stockholders Equity	777.69M	679.34M	625.76M	551.87M	540.96M	502.73M
Cash Flow
Free Cash Flow	0.00	295.49M	262.97M	199.82M	177.42M	258.13M
Operating Cash Flow	0.00	324.45M	294.97M	239.14M	208.48M	286.94M
Investing Cash Flow	0.00	-78.18M	-139.24M	-74.30M	-110.19M	-177.03M
Financing Cash Flow	0.00	-184.96M	-243.18M	-70.98M	-114.13M	9.73M

Formula Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 56880.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IL:FORTY, the sentiment is Positive. The current price of 56880 is above the 20-day moving average (MA) of 52532.00, above the 50-day MA of 49723.99, and above the 200-day MA of 40934.21, indicating a bullish trend. The MACD of 2171.67 indicates Negative momentum. The RSI at 69.79 is Neutral, neither overbought nor oversold. The STOCH value of 74.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IL:FORTY.

Formula Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ONE	73 Outperform	6.50B	24.39	―	2.70%	14.11%	25.79%
FORTY	73 Outperform	8.72B	34.01	―	2.63%	1.94%	-8.81%
MTRX	66 Neutral	9.32B	31.42	―	2.37%	8.82%	14.25%
MLTM	62 Neutral	2.88B	27.11	―	―	11.90%	13.57%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%