Formula Systems (1985) Ltd. (FORTY) Aandelenanalyse

Bedrijfsoverzicht

Formula Systems (1985) Ltd., operating under the ticker FORTY, functions as a provider of proprietary and non-proprietary software solutions alongside specialized information technology professional services. The enterprise serves a diverse global client base, extending its operations across Israel, the United States, Europe, Africa, Japan, and various international markets. This technology firm operates within the Information Technology Services industry, a segment characterized by the delivery of specialized IT expertise and software development rather than hardware manufacturing. The company demonstrates significant scale with a market capitalization of $1.86 billion and trailing twelve-month revenue of $2.63 billion, while the specific employee count is not disclosed in available filings. These valuation and revenue metrics position the entity as a substantial player in the technology sector, indicating a mature operational footprint capable of generating multi-billion dollar revenues. The substantial market cap relative to its specific revenue stream suggests a market valuation that incorporates intangible assets, brand equity, and potential future growth expectations beyond current reported sales figures.

Financiële gezondheid

The financial performance of the company is evidenced by trailing twelve-month revenue of $2.63 billion, a net income of $38.65 million, and an EBITDA of $241.94 million. The substantial disparity between the $2.63 billion in revenue and the $38.65 million in net income reveals a cost structure where operating expenses, including cost of goods sold and administrative costs, consume approximately 98.5% of top-line revenue before interest and taxes. While free cash flow data is not available in the current dataset, the company holds a robust cash position of $1.28 billion against total debt of $592.26 million, which suggests a strong liquidity buffer despite the lack of explicit free cash flow reporting. The balance sheet presents a complex picture with a debt-to-equity ratio of 32.93, indicating a highly leveraged capital structure relative to shareholders' equity. Despite this high leverage, the current ratio stands at 1.63, signaling that the company maintains sufficient current assets to cover its short-term liabilities without immediate distress. Profitability efficiency is further illuminated by a return on equity of 6.9% and a return on assets of 3.7%, metrics that indicate management's effectiveness in generating returns on the capital base, albeit with moderate efficiency given the asset intensity of the business.

Waarderingsbeoordeling

Valuation multiples for Formula Systems (1985) Ltd. include a trailing twelve-month P/E ratio of 52.74 and a forward P/E ratio that is not currently available for disclosure. The absence of a forward P/E ratio implies that analysts or the market may not have a consensus on near-term earnings growth trajectories, or the company's earnings volatility prevents a reliable forward multiple calculation. The price-to-book ratio is recorded at 1.36, indicating that the market values the company at a modest premium over its net tangible book value, suggesting that intangible assets or brand value contribute significantly to the stock price. Alternative valuation metrics such as the price-to-sales ratio of 0.71 and an EV/EBITDA of 6.63 provide a different perspective, suggesting the stock trades at a discount relative to sales while maintaining a reasonable enterprise value relative to earnings before interest, taxes, depreciation, and amortization. The stock's price action is bounded by a 52-week high of $190.56 and a 52-week low of $84.52, with the current trading price situated at a level that requires calculation based on the latest market quote to determine its precise percentage distance from these extremes. The beta coefficient of 0.17 indicates that the stock price exhibits very low volatility relative to the broader market, moving less than one-fifth as much as the market index during periods of fluctuation.

Growth & Income

Growth dynamics for the company are defined by a revenue growth rate of 2.4% year-over-year and an earnings growth rate of 2645.3% year-over-year. The massive divergence between the modest 2.4% revenue expansion and the extraordinary 2645.3% earnings surge implies a significant improvement in profitability margins or a one-time adjustment to non-recurring expenses that heavily impacted the net income calculation. The company distributes income to shareholders through a dividend yield of 2.0%, supported by a payout ratio of 107.1%. A payout ratio exceeding 100% indicates that the company is distributing more in dividends than it generates in net income, a strategy that relies on existing cash reserves or capital raising to sustain the dividend without immediate earnings support. This high payout ratio combined with the lack of free cash flow data suggests that the dividend sustainability is currently dependent on the company's substantial cash balance of $1.28 billion rather than operational cash generation. Overall, the profile combines a highly leveraged balance sheet with low price volatility and a dividend yield that is currently decoupled from current net income generation.