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MGIC

Magic Software EnterprisesNasdaqGS:MGIC Stock Report

Market Cap

US$1.1b

7D

-6.7%

1Y

31.5%

Updated

30 Nov, 2021

Data

Company Financials +
MGIC fundamental analysis
Snowflake Score
Valuation2/6
Future Growth4/6
Past Performance5/6
Financial Health5/6
Dividends2/6

MGIC Stock Overview

Magic Software Enterprises Ltd. provides proprietary application development, business process integration, vertical software solutions, and information technologies (IT) outsourcing software services in Israel and internationally.

Magic Software Enterprises Competitors

salesforce.com

NYSE:CRM

US$290.5b

Pegasystems

NasdaqGS:PEGA

US$9.6b

Microsoft

NasdaqGS:MSFT

US$2.5t

Oracle

NYSE:ORCL

US$254.1b

Price History & Performance

Summary of all time highs, changes and price drops for Magic Software Enterprises
Historical stock prices
Current Share PriceUS$21.73
52 Week HighUS$25.49
52 Week LowUS$14.26
Beta1.38
1 Month Change-0.23%
3 Month Change5.69%
1 Year Change31.46%
3 Year Change168.60%
5 Year Change199.72%
Change since IPO702.34%

Recent News & Updates

Nov 03
Should You Think About Buying Magic Software Enterprises Ltd. (NASDAQ:MGIC) Now?

Should You Think About Buying Magic Software Enterprises Ltd. (NASDAQ:MGIC) Now?

Magic Software Enterprises Ltd. ( NASDAQ:MGIC ), is not the largest company out there, but it led the NASDAQGS gainers...

Oct 18
There's Been No Shortage Of Growth Recently For Magic Software Enterprises' (NASDAQ:MGIC) Returns On Capital

There's Been No Shortage Of Growth Recently For Magic Software Enterprises' (NASDAQ:MGIC) Returns On Capital

What trends should we look for it we want to identify stocks that can multiply in value over the long term? Firstly...

Sep 12

Magic Software Enterprises: Benefits From Durable M&A, Digitalization And Logistics Strength

As part of Asseco's Formula Systems assets, Magic Software has delivered soundly in their businesses with over 20% in organic revenue growth. With exposure to business transformation initiatives, related substantially to acquisition activity, Magic is likely to continue to deliver. Moreover, the digitalization trends accelerated by COVID-19 continue to be a tailwind for Magic in IT services and for the rest of their software on offer. For a low double-digit multiple and with even a decent dividend yield, Magic is a worthwhile exposure which we continue to hold through Asseco Poland.

Aug 15
Magic Software Enterprises' (NASDAQ:MGIC) Shareholders Will Receive A Bigger Dividend Than Last Year

Magic Software Enterprises' (NASDAQ:MGIC) Shareholders Will Receive A Bigger Dividend Than Last Year

The board of Magic Software Enterprises Ltd. ( NASDAQ:MGIC ) has announced that it will be increasing its dividend on...

Shareholder Returns

MGICUS SoftwareUS Market
7D-6.7%-0.4%-0.9%
1Y31.5%36.8%23.3%

Return vs Industry: MGIC underperformed the US Software industry which returned 33.7% over the past year.

Return vs Market: MGIC exceeded the US Market which returned 21.3% over the past year.

Price Volatility

Is MGIC's price volatile compared to industry and market?
MGIC volatility
MGIC Average Weekly Movement4.7%
Software Industry Average Movement7.4%
Market Average Movement6.0%
10% most volatile stocks in US Market15.0%
10% least volatile stocks in US Market2.3%

Stable Share Price: MGIC is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: MGIC's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19833,039Guy Bernsteinhttps://www.magicsoftware.com

Magic Software Enterprises Ltd. provides proprietary application development, business process integration, vertical software solutions, and information technologies (IT) outsourcing software services in Israel and internationally. The company’s Software Services segment develops, markets, sells, and supports application platform, software applications, and business and process integration solutions and related services. Its IT Professional Services segment offers IT services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, communications services and solutions, and supplemental outsourcing services.

Magic Software Enterprises Fundamentals Summary

How do Magic Software Enterprises's earnings and revenue compare to its market cap?
MGIC fundamental statistics
Market CapUS$1.07b
Earnings (TTM)US$28.01m
Revenue (TTM)US$451.90m

38.0x

P/E Ratio

2.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
MGIC income statement (TTM)
RevenueUS$451.90m
Cost of RevenueUS$325.39m
Gross ProfitUS$126.50m
ExpensesUS$98.49m
EarningsUS$28.01m

Last Reported Earnings

Sep 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)0.57
Gross Margin27.99%
Net Profit Margin6.20%
Debt/Equity Ratio14.6%

How did MGIC perform over the long term?

See historical performance and comparison

Dividends

2.2%

Current Dividend Yield

78%

Payout Ratio

Valuation

Is Magic Software Enterprises undervalued compared to its fair value and its price relative to the market?

38.04x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MGIC ($21.73) is trading above our estimate of fair value ($9.45)

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


Price To Earnings Ratio

PE vs Industry: MGIC is good value based on its PE Ratio (38x) compared to the US Software industry average (43.6x).

PE vs Market: MGIC is poor value based on its PE Ratio (38x) compared to the US market (17.1x).


Price to Earnings Growth Ratio

PEG Ratio: MGIC is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: MGIC is good value based on its PB Ratio (4.1x) compared to the US Software industry average (6.4x).


Future Growth

How is Magic Software Enterprises forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

23.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MGIC's forecast earnings growth (23.8% per year) is above the savings rate (2%).

Earnings vs Market: MGIC's earnings (23.8% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: MGIC's revenue (11.4% per year) is forecast to grow faster than the US market (10.1% per year).

High Growth Revenue: MGIC's revenue (11.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if MGIC's Return on Equity is forecast to be high in 3 years time


Past Performance

How has Magic Software Enterprises performed over the past 5 years?

13.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MGIC has high quality earnings.

Growing Profit Margin: MGIC's current net profit margins (6.2%) are higher than last year (4.6%).


Past Earnings Growth Analysis

Earnings Trend: MGIC's earnings have grown by 13.4% per year over the past 5 years.

Accelerating Growth: MGIC's earnings growth over the past year (71.6%) exceeds its 5-year average (13.4% per year).

Earnings vs Industry: MGIC earnings growth over the past year (71.6%) exceeded the Software industry 20.5%.


Return on Equity

High ROE: MGIC's Return on Equity (11.7%) is considered low.


Financial Health

How is Magic Software Enterprises's financial position?


Financial Position Analysis

Short Term Liabilities: MGIC's short term assets ($232.8M) exceed its short term liabilities ($95.6M).

Long Term Liabilities: MGIC's short term assets ($232.8M) exceed its long term liabilities ($80.9M).


Debt to Equity History and Analysis

Debt Level: MGIC has more cash than its total debt.

Reducing Debt: MGIC's debt to equity ratio has increased from 2% to 14.6% over the past 5 years.

Debt Coverage: MGIC's debt is well covered by operating cash flow (104.7%).

Interest Coverage: MGIC's interest payments on its debt are well covered by EBIT (21.4x coverage).


Balance Sheet


Dividend

What is Magic Software Enterprises's current dividend yield, its reliability and sustainability?

2.15%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: MGIC's dividend (2.15%) is higher than the bottom 25% of dividend payers in the US market (1.32%).

High Dividend: MGIC's dividend (2.15%) is low compared to the top 25% of dividend payers in the US market (3.58%).


Stability and Growth of Payments

Stable Dividend: MGIC has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: MGIC's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (77.7%), MGIC's payments are 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?

9.2yrs

Average management tenure


CEO

Guy Bernstein (53 yo)

11.58yrs

Tenure

Mr. Guy Bernstein is the Chief Executive Officer of Magic Software Enterprises Ltd. since April 2010 and has been its Director since January 01, 2007. Mr. Bernstein served as a member of our board of direc...


Leadership Team

Experienced Management: MGIC's management team is seasoned and experienced (9.2 years average tenure).


Board Members

Experienced Board: MGIC's board of directors are considered experienced (6.9 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 not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Magic Software Enterprises Ltd.'s employee growth, exchange listings and data sources


Key Information

  • Name: Magic Software Enterprises Ltd.
  • Ticker: MGIC
  • Exchange: NasdaqGS
  • Founded: 1983
  • Industry: Application Software
  • Sector: Software
  • Market Cap: US$1.066b
  • Shares outstanding: 49.04m
  • Website: https://www.magicsoftware.com

Number of Employees


Location

  • Magic Software Enterprises Ltd.
  • Terminal Center
  • Yahadut Canada 1 Street
  • Or Yehuda
  • 60375 01
  • Israel

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/11/30 00:15
End of Day Share Price2021/11/29 00:00
Earnings2021/09/30
Annual Earnings2020/12/31


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.