Formula (FORTY) AI Stock Analysis

4 Followers

Formula

(TASE:FORTY)

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Rating:77Outperform

Price Target:ILA 43,686.00▲(15.51% Upside)

Action:reiterated

Date:08/18/26

Strong financial performance and attractive valuation are primary positives, tempered by weak technical momentum.

Positive Factors

Lower LeverageThe substantial reduction in debt relative to equity strengthens the capital structure and reduces financial pressure. Lower leverage should improve resilience through operating volatility, preserve borrowing capacity, and provide management with greater flexibility to fund investment or withstand weaker conditions.

Negative Factors

Recent Revenue DeclineThe 2025 revenue contraction interrupts the prior expansion trend and raises concern about near-term demand or business momentum. Persistent top-line weakness could reduce operating leverage, limit reinvestment capacity, and make future profit growth increasingly dependent on cost actions rather than organic expansion.

Formula (FORTY) vs. iShares MSCI Israel ETF (EIS)

Market Cap: ILS 5.90B
Dividend Yield: 11.70%
Average Volume (3M): 17.74K
Price to Earnings (P/E): 2.9
Beta (1Y): 0.91
Revenue Growth: -12.16%
EPS Growth: 615.00%
Country: Israel
Employees: 21,900
Sector: General
Sector Strength: 55
Industry: Information Technology Services

Formula Business Overview & Revenue Model

Company Description

Formula Systems (1985) Ltd. is a global technology enterprise delivering a broad spectrum of IT services and products. The company specializes in developing and distributing both proprietary and third-party software solutions, offering extensive prof...

Formula Financial Statement Overview

Summary

Robust balance sheet with reduced leverage, strong cash generation, and steady revenue growth support solid financial performance despite net income volatility.

Income Statement

82Very Positive

Balance Sheet

90Very Positive

Cash Flow

88Very Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.93B	2.84B	2.76B	2.62B	2.57B	2.41B
Gross Profit	581.06M	561.98M	684.68M	643.71M	622.47M	563.86M
EBITDA	269.18M	355.10M	391.80M	362.53M	390.45M	324.26M
Net Income	642.15M	656.50M	79.67M	64.01M	81.39M	54.59M
Balance Sheet
Total Assets	3.48B	3.58B	3.01B	2.81B	2.79B	2.75B
Cash, Cash Equivalents and Short-Term Investments	858.75M	1.28B	563.20M	528.17M	569.06M	512.46M
Total Debt	670.60M	592.38M	644.21M	669.99M	772.14M	712.91M
Total Liabilities	1.84B	1.81B	1.63B	1.50B	1.62B	1.57B
Stockholders Equity	1.21B	1.35B	679.34M	625.76M	551.88M	540.96M
Cash Flow
Free Cash Flow	0	402.54M	295.49M	262.97M	199.82M	177.42M
Operating Cash Flow	0	420.06M	324.45M	294.97M	239.14M	208.48M
Investing Cash Flow	0	579.13M	-78.18M	-139.24M	-74.30M	-110.19M
Financing Cash Flow	0	-217.01M	-184.96M	-243.18M	-70.98M	-114.13M

Formula Technical Analysis

Technical Analysis SentimentPositive

Last Price37820.00

Price Trends

50DMA36227.54Positive

100DMA34259.51Positive

200DMA35649.24Positive

Market Momentum

MACD523.31Negative

RSI56.04Neutral

STOCH84.05Negative

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 37820.00 is above the 20-day moving average (MA) of 37168.00, above the 50-day MA of 36227.54, and above the 200-day MA of 35649.24, indicating a bullish trend. The MACD of 523.31 indicates Negative momentum. The RSI at 56.04 is Neutral, neither overbought nor oversold. The STOCH value of 84.05 is Negative, 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

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

IL:FORTY against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IL:FORTY	77Outperform	ILS 5.90B	2.89	―	11.70%	-12.16%	615.00%
IL:NYAX	62Neutral	ILS 6.19B	242.01	―	―	11.86%	-83.90%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%

* General Sector Average

Performance Comparison

IL:FORTY and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
IL:FORTY	Formula Systems (1985) Ltd.	37820.00	-7836.00	-17.16%
IL:CMDR	Computer Direct Group Ltd	33480.00	-13287.44	-28.41%
IL:NYAX	Nayax Ltd.	16660.00	3160.00	23.41%
IL:SPDV	Speedvalue Ltd.	112.70	-237.30	-67.80%

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 18, 2026

Formula AI Stock Analysis