Formula Systems (1985) Ltd (FORTY, Financial) has recently demonstrated a robust performance in the stock market, with a notable increase in its share price. Over the past week, the company's stock price has surged by 9.64%, and over the last three months, it has gained an impressive 15.59%. Currently, the market capitalization stands at $1.38 billion, with a share price of $86.23. According to the GF Value, the stock is fairly valued at $84.53, which is a slight increase from being modestly undervalued three months ago when the GF Value was $104.59.
Overview of Formula Systems (1985) Ltd
Formula Systems (1985) Ltd operates in the software industry, primarily through its subsidiaries, providing a range of IT services. The company's business model is structured into several segments, including Matrix, which is the largest revenue contributor, Sapiens, Magic Software, and others. These segments offer services ranging from software development to vendor management systems. The majority of Formula Systems' revenue is generated in Israel, making it a pivotal player in the region's tech sector.
Assessing Profitability
Formula Systems boasts a high Profitability Rank of 9/10, indicating its superior ability to generate income relative to its peers. The company's operating margin stands at 9.10%, which is better than 68.57% of its industry counterparts. Additionally, its Return on Equity (ROE) is 10.98%, and Return on Assets (ROA) is 2.38%, both metrics surpassing over half of the competition. The Return on Invested Capital (ROIC) is also impressive at 9.84%. These figures not only highlight the company's efficient operational management but also its consistent profitability over the past decade.
Growth Trajectory
The company's Growth Rank is 8/10, reflecting strong growth metrics. Over the past three years, Formula Systems has achieved a revenue growth rate per share of 10.20%, and over five years, this rate has increased to 12.90%. The 3-Year EPS without NRI Growth Rate is 10.50%, and the 5-Year EPS without NRI Growth Rate is 12.20%. These growth rates are commendable, positioning Formula Systems well above the median of its industry peers.
Competitive Landscape
Formula Systems competes with several key players in the software industry. Hilan Ltd (XTAE:HLAN, Financial) with a market cap of $1.31 billion, Nayax Ltd (XTAE:NYAX, Financial) valued at $878.645 million, and Magic Software Enterprises Ltd (XTAE:MGIC, Financial) with a market cap of $560.383 million are among its primary competitors. These companies, like Formula Systems, play significant roles in their respective niches within the software sector, contributing to the dynamic competitive environment.
Conclusion
Formula Systems (1985) Ltd has shown a strong market performance and financial health, as evidenced by its recent stock price rally and solid growth and profitability metrics. The company's strategic operations in various segments of the IT services industry, combined with its consistent profitability and growth, make it a potentially attractive investment. Investors looking for stable returns in the technology sector might find Formula Systems an appealing option, especially considering its competitive stance in the market.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
