Formula Systems (FORTY) AI Stock Analysis

• Market Cap: $1.57B
• Dividend Yield: 1.84%
• Average Volume (3M): 279.00
• Price to Earnings (P/E): 19.1
• Beta (1Y): 0.85
• Revenue Growth: 3.51%
• EPS Growth: 18.34%
• Country: US
• Employees: 21,900
• Sector: Technology
• Sector Strength: 79
• Industry: Information Technology Services
• EPS (TTM): 1.26
• Shares Outstanding: 15,332,667
• 10 Day Avg. Volume: 245
• 30 Day Avg. Volume: 279
• PEG Ratio: 0.13
• Price to Book (P/B): 1.96
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.43
• Enterprise Value/Market Cap: 0.83
• Enterprise Value/Revenue: 0.12
• Enterprise Value/Gross Profit: 1.97
• Enterprise Value/Ebitda: 1.32
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 71 Outperform
• Price Target: ―

Formula Systems scores well on financial performance due to its revenue growth and strong cash flow, though there is a need to address profitability. Technical indicators suggest positive momentum, but valuation metrics indicate the stock is fairly priced without significant upside potential. The lack of earnings call and corporate events information limits further insights. The overall stock score reflects a stable but cautious outlook.

Formula Systems Business Overview & Revenue Model

Company Description

Formula Systems (FORTY) is a multinational information technology company that operates within the software and information technology services sector. The company is headquartered in Israel and provides a range of services, including IT solutions, software development, and integration services, catering to various industries such as financial services, telecommunications, healthcare, and manufacturing.

How the Company Makes Money

Formula 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.

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.

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.

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
510.85M	528.17M	569.06M	512.46M	533.15M	405.53M
	Total Assets
2.85B	2.81B	2.79B	2.75B	2.52B	2.09B
	Total Debt
676.72M	669.99M	772.67M	712.91M	668.54M	603.49M
	Net Debt
207.01M	218.04M	228.33M	227.52M	166.91M	234.45M
	Total Liabilities
1.49B	1.50B	1.62B	1.57B	1.41B	1.19B
	Stockholders Equity
660.09M	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

• Technical Analysis Sentiment: Positive
• Last Price: 102.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 102 is below the 20-day moving average (MA) of 105.51, above the 50-day MA of 96.04, and above the 200-day MA of 88.53, indicating a neutral trend. The MACD of 2.57 indicates Positive momentum. The RSI at 48.26 is Neutral, neither overbought nor oversold. The STOCH value of 14.97 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FORTY.

Formula Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INFY	80 Outperform	$77.20B	24.14	29.00%	2.80%	3.85%	-0.38%
ACN	78 Outperform	$195.14B	25.72	27.26%	1.90%	4.10%	9.78%
CTSH	76 Outperform	$38.92B	16.62	16.61%	1.57%	4.09%	14.05%
IBM	76 Outperform	$257.65B	47.69	21.91%	2.42%	1.23%	-33.87%
FORTY	71 Outperform	$1.57B	19.08	12.47%	1.84%	3.51%	18.34%
Sector *	62 Neutral	$11.80B	10.10	-7.47%	2.99%	7.37%	-8.16%
DXC	46 Neutral	$2.83B	7.39	12.88%	―	-5.65%	78.20%