Formula Systems (1985) Ltd. Fundamental Analysis
Formula Systems (1985) Ltd. Fundamental Analysis
Formula Systems (1985) Ltd. (FORTY) shows strong financial fundamentals with a PE ratio of 3.02, profit margin of 21.54%, and ROE of 58.99%. The company generates $2.9B in annual revenue with moderate year-over-year growth of 3.13%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 76.6/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze FORTY's fundamental strength across five key dimensions:
Efficiency Score
ExcellentFORTY demonstrates superior asset utilization.
Valuation Score
ExcellentFORTY trades at attractive valuation levels.
Growth Score
WeakFORTY faces weak or negative growth trends.
Financial Health Score
ExcellentFORTY maintains a strong and stable balance sheet.
Profitability Score
ExcellentFORTY achieves industry-leading margins.
Key Financial Metrics
Is FORTY Expensive or Cheap?
P/E Ratio
FORTY trades at 3.02 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, FORTY's PEG of 0.00 indicates potential undervaluation.
Price to Book
The market values Formula Systems (1985) Ltd. at 1.37 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 10.80 times EBITDA. This signals the market has high growth expectations.
How Well Does FORTY Make Money?
Net Profit Margin
For every $100 in sales, Formula Systems (1985) Ltd. keeps $21.54 as profit after all expenses.
Operating Margin
Core operations generate 7.63 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $58.99 in profit for every $100 of shareholder equity.
ROA
Formula Systems (1985) Ltd. generates $17.22 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Formula Systems (1985) Ltd. produces operating cash flow of $391.77M, showing steady but balanced cash generation.
Free Cash Flow
Formula Systems (1985) Ltd. generates strong free cash flow of $375.43M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $24.48 in free cash annually.
FCF Yield
FORTY converts 19.55% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
3.02
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.005
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.37
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.65
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.49
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.68
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.59
vs 25 benchmark
ROA
Return on assets percentage
0.17
vs 25 benchmark
ROCE
Return on capital employed
0.09
vs 25 benchmark
How FORTY Stacks Against Its Sector Peers
| Metric | FORTY Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 3.02 | 36.36 | Better (Cheaper) |
| ROE | 58.99% | 980.00% | Weak |
| Net Margin | 21.54% | 5969454258.00% | Weak |
| Debt/Equity | 0.49 | 0.36 | Weak (High Leverage) |
| Current Ratio | 1.68 | 5.04 | Neutral |
| ROA | 17.22% | -298400.00% (disorted) | Strong |
FORTY outperforms its industry in 2 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Formula Systems (1985) Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
46.83%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
482.75%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
46.17%
Industry Style: Growth, Innovation, High Beta
High Growth