NasdaqGS:FORT.Y

Stock Analysis Report

Executive Summary

Formula Systems (1985) Ltd., through its subsidiaries, provides software, proprietary and non-proprietary software, and software product marketing and support services.


Snowflake Analysis

Proven track record with mediocre balance sheet.

Share Price & News

How has Formula Systems (1985)'s share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FORT.Y has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.2%

FORT.Y

-12.1%

US IT

-10.6%

US Market


1 Year Return

67.2%

FORT.Y

16.7%

US IT

5.2%

US Market

Return vs Industry: FORT.Y exceeded the US IT industry which returned 16.7% over the past year.

Return vs Market: FORT.Y exceeded the US Market which returned 5.2% over the past year.


Shareholder returns

FORT.YIndustryMarket
7 Day-2.2%-12.1%-10.6%
30 Dayn/a-9.0%-8.5%
90 Day-0.8%-2.0%-4.6%
1 Year69.1%67.2%17.9%16.7%7.4%5.2%
3 Year76.8%71.7%82.2%74.4%31.7%23.2%
5 Year199.4%181.4%119.6%100.4%56.4%39.3%

Price Volatility Vs. Market

How volatile is Formula Systems (1985)'s share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Formula Systems (1985) undervalued compared to its fair value and its price relative to the market?

25.45x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: FORT.Y ($69.57) is trading above our estimate of fair value ($66.73)

Significantly Below Fair Value: FORT.Y is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: FORT.Y is good value based on its PE Ratio (25.4x) compared to the IT industry average (29.4x).

PE vs Market: FORT.Y is poor value based on its PE Ratio (25.4x) compared to the US market (16.9x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate FORT.Y's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: FORT.Y is good value based on its PB Ratio (2.5x) compared to the US IT industry average (3.9x).


Next Steps

Future Growth

How is Formula Systems (1985) forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

16.8%

Forecasted Software industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Formula Systems (1985) has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Formula Systems (1985) performed over the past 5 years?

-22.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FORT.Y has high quality earnings.

Growing Profit Margin: FORT.Y's current net profit margins (2.4%) are higher than last year (1.8%).


Past Earnings Growth Analysis

Earnings Trend: FORT.Y's earnings have declined by -22.7% per year over the past 5 years.

Accelerating Growth: FORT.Y's earnings growth over the past year (50.9%) exceeds its 5-year average (-22.7% per year).

Earnings vs Industry: FORT.Y earnings growth over the past year (50.9%) exceeded the IT industry 12%.


Return on Equity

High ROE: FORT.Y's Return on Equity (10.7%) is considered low.


Next Steps

Financial Health

How is Formula Systems (1985)'s financial position?


Financial Position Analysis

Short Term Liabilities: FORT.Y's short term assets ($903.5M) exceed its short term liabilities ($656.5M).

Long Term Liabilities: FORT.Y's short term assets ($903.5M) exceed its long term liabilities ($473.4M).


Debt to Equity History and Analysis

Debt Level: FORT.Y's debt to equity ratio (55.9%) is considered high.

Reducing Debt: FORT.Y's debt to equity ratio has increased from 29.1% to 55.9% over the past 5 years.

Debt Coverage: FORT.Y's debt is not well covered by operating cash flow (16.9%).

Interest Coverage: FORT.Y's interest payments on its debt are well covered by EBIT (13.4x coverage).


Balance Sheet

Inventory Level: FORT.Y has a low level of unsold assets or inventory.

Debt Coverage by Assets: FORT.Y's debt is covered by short term assets (assets are 1.9x debt).


Next Steps

Dividend

What is Formula Systems (1985)'s current dividend yield, its reliability and sustainability?

1.38%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: FORT.Y's dividend (1.38%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.59%).

High Dividend: FORT.Y's dividend (1.38%) is low compared to the top 25% of dividend payers in the US market (4.09%).


Stability and Growth of Payments

Stable Dividend: FORT.Y's dividend payments have been volatile in the past 10 years.

Growing Dividend: FORT.Y's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (19.8%), FORT.Y's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

8.3yrs

Average management tenure


CEO

Guy Bernstein (51yo)

12.1yrs

Tenure

US$517,000

Compensation

Mr. Guy Bernstein is the Chief Executive Officer of Magic Software Enterprises Ltd. since April 2010 and has been its Director since January 2007. Mr. Bernstein served as Chairman of the Board at Magic Sof ...


CEO Compensation Analysis

Compensation vs Market: Guy's total compensation ($USD517.00K) is below average for companies of similar size in the US market ($USD2.59M).

Compensation vs Earnings: Guy's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Guy Bernstein
Chief Executive Officer12.1yrsUS$517.00k12.89% $131.8m
Maya Solomon-Ella
Chief Operational Officer3.4yrsUS$217.00kno data
Asaf Berenstin
Chief Financial Officer8.3yrsno datano data

8.3yrs

Average Tenure

41yo

Average Age

Experienced Management: FORT.Y's management team is seasoned and experienced (8.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Iris Yahal
External Director6.8yrsUS$65.00kno data
Marek Panek
Chairman of the Board0yrsUS$37.00kno data
Rafal Kozlowski
Director7.5yrsUS$37.00kno data
Eli Zamir
External Director6.8yrsUS$44.00kno data
Ohad Melnik
Director1.1yrsno datano data

6.8yrs

Average Tenure

49yo

Average Age

Experienced Board: FORT.Y's board of directors are considered experienced (6.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.6%.


Top Shareholders

Company Information

Formula Systems (1985) Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Formula Systems (1985) Ltd.
  • Ticker: FORT.Y
  • Exchange: NasdaqGS
  • Founded: 1985
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: ₪3.530b
  • Listing Market Cap: ₪1.022b
  • Shares outstanding: 15.29m
  • Website: https://www.formulasystems.com

Number of Employees


Location

  • Formula Systems (1985) Ltd.
  • 5 HaPlada Street
  • Or Yehuda
  • 60218
  • Israel

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FORTYTASE (The Tel-Aviv Stock Exchange)YesOrdinary SharesILILSMay 1995
FORT.YNasdaqGS (Nasdaq Global Select)ADR EACH REP 1 ORD ILS1 LEVELII(BNY)USUSDOct 1997
FSYMUN (Boerse Muenchen)ADR EACH REP 1 ORD ILS1 LEVELII(BNY)DEEUROct 1997
FSYDB (Deutsche Boerse AG)ADR EACH REP 1 ORD ILS1 LEVELII(BNY)DEEUROct 1997

Biography

Formula Systems (1985) Ltd., through its subsidiaries, provides software, proprietary and non-proprietary software, and software product marketing and support services. The company offers computer and telecommunication infrastructure solutions; computer solutions to computer and communications infrastructures; cloud computing solutions; database and big data services; customer relations management, computer systems management infrastructures, Web world content management, database and data warehouse mining, application integration, database and systems, data management, and software development tools; and professional training courses and advanced professional studies. It also markets and sells computers and peripheral equipment to business customers. In addition, the company offers property and casualty insurance platforms, such as Sapiens, Sapiens CoreSuite, Sapiens IDITSuite, Sapiens PolicyPro, Sapiens BillingPro, Sapiens ClaimsPro, and Sapiens Stingray; life, pension, and annuities platforms, including Sapiens CoreSuite, Sapiens UnderwritingPro, Sapiens ApplicationPro, Sapiens IllustrationPro, and Sapiens ConsolidationMaster; reinsurance software solutions comprising Sapiens ReinsuranceMaster, Sapiens ReinsurancePro, and Sapiens Reinsurance GO; and Sapiens platform for workers’ compensation solutions. Further, it provides financial and compliance solutions that include Sapiens FinancialPro, Sapiens Financial GO, and Sapiens StatementPro; Sapiens DECISION, a decision management platform; and technology-based solutions and digital insurance suites. Additionally, the company offers application development and business process integration platforms; vertical software solutions; vendor of software services and IT outsourcing software services; and professionals in various areas, as well as develops on-premise payroll software solutions. Formula Systems (1985) Ltd. was founded in 1985 and is headquartered in Or Yehuda, Israel. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/28 00:11
End of Day Share Price2020/02/27 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.