Formula Systems (1985) Ltd. (IL:FORTY)
TASE:FORTY
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Formula
(TASE:FORTY)
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Rating:69Neutral
Price Target:
43,143.00
▼(-20.11% Downside)
Action:Downgraded
Date:05/18/26
The score is supported most by extremely cheap valuation (very low P/E) and a constructive balance-sheet/FCF profile, but is held back by weak technical trend signals and concerns about the durability of the 2025 profit surge given revenue decline and weaker cash conversion.
Positive Factors
Leverage Reduction
Debt-to-equity falling to ~0.43 is a durable improvement in capital structure. Lower leverage reduces default and refinancing risk, raises financial flexibility to invest or return capital, and supports steadier operations and credit access over the next several quarters.
Negative Factors
2025 Revenue Decline
A revenue decline in 2025 interrupts prior multi-year growth and raises questions about market demand or competitive pressures. If top-line momentum weakens, sustaining margins and funding reinvestment or distributions becomes harder over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Leverage Reduction
Debt-to-equity falling to ~0.43 is a durable improvement in capital structure. Lower leverage reduces default and refinancing risk, raises financial flexibility to invest or return capital, and supports steadier operations and credit access over the next several quarters.
Read all positive factors
Formula (FORTY) vs. iShares MSCI Israel ETF (EIS)
Market Cap
₪6.49B
Dividend Yield2.68%
Average Volume (3M)15.46K
Price to Earnings (P/E)1.1
Beta (1Y)1.10
Revenue Growth-1.68%
EPS Growth573.09%
CountryIL
Employees21,900
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)4.31
Shares Outstanding15,332,667
10 Day Avg. Volume14,660
30 Day Avg. Volume15,457
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)1.91
Price to Sales (P/S)0.91
P/FCF Ratio6.41
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
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Formula Business Overview & Revenue Model
Company Description
Formula 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. ...
Formula Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
70
Positive
Cash Flow
63
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.89B | 2.84B | 2.76B | 2.62B | 2.57B | 2.41B |
| Gross Profit | 683.03M | 561.98M | 684.68M | 643.71M | 622.47M | 563.86M |
| EBITDA | 282.02M | 202.59M | 391.80M | 362.53M | 390.45M | 324.26M |
| Net Income | 71.75M | 656.50M | 79.67M | 64.01M | 201.47M | 141.40M |
Balance Sheet | ||||||
| Total Assets | 3.33B | 3.60B | 3.01B | 2.81B | 2.79B | 2.75B |
| Cash, Cash Equivalents and Short-Term Investments | 432.08M | 1.28B | 563.20M | 528.17M | 569.06M | 512.46M |
| Total Debt | 638.70M | 592.38M | 644.21M | 669.99M | 772.67M | 712.91M |
| Total Liabilities | 1.75B | 1.81B | 1.63B | 1.50B | 1.62B | 1.57B |
| Stockholders Equity | 777.69M | 1.35B | 679.34M | 625.76M | 551.87M | 540.96M |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 402.54M | 295.49M | 262.97M | 199.82M | 177.42M |
| Operating Cash Flow | 0.00 | 420.06M | 324.45M | 294.97M | 239.14M | 208.48M |
| Investing Cash Flow | 0.00 | 579.13M | -78.18M | -139.24M | -74.30M | -110.19M |
| Financing Cash Flow | 0.00 | -217.01M | -184.96M | -243.18M | -70.98M | -114.13M |
Formula Technical Analysis
Positive
54000.00
Price Trends
40107.00
Positive
43681.93
Negative
45201.03
Negative
Market Momentum
415.96
Positive
53.85
Neutral
60.03
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 54000 is above the 20-day moving average (MA) of 41696.50, above the 50-day MA of 40107.00, and above the 200-day MA of 45201.03, indicating a neutral trend. The MACD of 415.96 indicates Positive momentum. The RSI at 53.85 is Neutral, neither overbought nor oversold. The STOCH value of 60.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IL:FORTY.
Formula Risk Analysis
Formula disclosed 52 risk factors in its most recent earnings report. Formula 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 Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | ₪6.49B | 1.14 | ― | 2.68% | -1.68% | 573.09% | |
68 Neutral | ₪4.93B | 24.65 | ― | 2.55% | 16.92% | 12.83% | |
64 Neutral | ₪8.77B | 27.48 | ― | 2.41% | 20.24% | 12.51% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
55 Neutral | ₪1.80B | -125.80 | ― | ― | 9.07% | -22.97% |
* Technology Sector Average
IL:FORTY
Formula
41,960.00
6,149.42
17.17%
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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.