Bedrijfsoverzicht
Magic Software Enterprises Ltd. is a technology firm that specializes in providing proprietary application development, vertical software solutions, business process integration, information technologies outsourcing software services, and cloud-based services on a global scale. The company operates within the broader Technology sector, specifically functioning within the Information Technology Services industry, which positions it as a provider of specialized digital infrastructure and software tools to various business verticals. With a market capitalization of $952.53M, annual revenue of $603.22M, and an employee base of 3787, the firm demonstrates significant operational scale within its niche. These valuation and revenue figures indicate that Magic Software Enterprises maintains a substantial market presence, suggesting it has secured a dominant foothold in delivering complex IT services and software products to a worldwide client base.
Financiële gezondheid
The company reported revenue of $603.22M and net income of $39.88M over the trailing twelve months, while generating an EBITDA of $76.76M. The substantial gap between the $603.22M in revenue and the $39.88M in net income reveals a cost structure where operating expenses and taxes consume approximately 93.4% of total sales before considering non-operating items, leaving a profit margin of 6.6%. Free cash flow stands at $70.09M, which provides the organization with significant financial flexibility to fund capital expenditures, reduce debt, or invest in research and development without relying on external financing. The gross margin is recorded at 28.2%, indicating the percentage of revenue remaining after direct costs of goods sold are deducted, while the operating margin of 10.6% reflects the efficiency of core business operations relative to total revenue. The profit margin of 6.6% further illustrates the final profitability after all expenses, including interest and taxes, are accounted for. On the balance sheet, the company holds $103.31M in cash against $95.89M in debt, resulting in a debt-to-equity ratio of 31.87, which suggests a leveraged balance sheet where equity is lower than the combined interest-bearing liabilities. Despite the leverage, the current ratio of 1.48 indicates that the company possesses sufficient current assets to cover its short-term liabilities, pointing to adequate short-term liquidity. Return on Equity is calculated at 15.6%, demonstrating that the company generates a robust return on the shareholders' invested capital, while Return on Assets sits at 7.4%, showing how efficiently the company utilizes its total asset base to generate earnings.
Waarderingsbeoordeling
Magic Software Enterprises Ltd. currently trades with a trailing P/E ratio of 23.66 and a forward P/E of 17.20. The notable difference between the trailing and forward P/E ratios implies that the market expects earnings growth in the future, as the forward multiple is significantly lower than the historical multiple, suggesting a compression of valuation or anticipated profit expansion. The price-to-book ratio is 3.45, which indicates that the stock is trading at a premium of roughly 245% above its tangible book value, reflecting investor confidence in the company's intangible assets and future earning potential. Alternative valuation metrics such as the price-to-sales ratio of 1.58 and the EV/EBITDA of 12.63 provide context relative to the company's sales and operational cash generation capabilities, suggesting the firm is valued moderately compared to its revenue base and earnings before interest, taxes, depreciation, and amortization. The 52-week high is $28.00 and the 52-week low is $11.65, meaning the current trading price sits well within this historical range but is closer to the upper end, having recovered significantly from the yearly lows. The beta value is 0.75, which indicates that the stock's price volatility is approximately 25% lower than the broader market, suggesting the asset acts as a relative defensive position during periods of market turbulence.
Growth & Income
Revenue growth over the last year is 13.1%, while earnings growth is 17.6%, indicating that profitability is expanding at a faster rate than top-line sales. This divergence suggests that the company is successfully improving its operational efficiency or leveraging pricing power, allowing net income to outpace revenue expansion. The company offers a dividend yield of 5.2%, but the payout ratio is 104.8%, which means the firm is paying out slightly more in dividends than it reports as net income for the trailing twelve months. Such a payout ratio above 100% implies that the company is utilizing cash on hand or reserves to fund the dividend, which may be unsustainable if earnings do not grow to match the payout or if the payout ratio normalizes in future periods. Given the high payout ratio, the firm is effectively returning a significant portion of its earnings to shareholders rather than retaining all profits for reinvestment. The overall growth and income profile presents a mix of moderate top-line expansion, accelerating earnings growth, and a high-yield dividend that currently relies on non-earnings funding sources.