Formula Systems (1985) Ltd.
Formula Systems (1985) Ltd. Fundamental Analysis
Formula Systems (1985) Ltd. (FORTY) shows weak financial fundamentals with a PE ratio of 39.34, profit margin of 2.49%, and ROE of 10.03%. The company generates $1.9B in annual revenue with moderate year-over-year growth of 5.21%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 36.9/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze FORTY's fundamental strength across five key dimensions:
Efficiency Score
WeakFORTY struggles to generate sufficient returns from assets.
Valuation Score
ModerateFORTY shows balanced valuation metrics.
Growth Score
ExcellentFORTY delivers strong and consistent growth momentum.
Financial Health Score
ExcellentFORTY maintains a strong and stable balance sheet.
Profitability Score
WeakFORTY struggles to sustain strong margins.
Key Financial Metrics
Is FORTY Expensive or Cheap?
P/E Ratio
FORTY trades at 39.34 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, FORTY's PEG of -2.54 indicates potential undervaluation.
Price to Book
The market values Formula Systems (1985) Ltd. at 3.63 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 5.85 times EBITDA. This is generally considered low.
How Well Does FORTY Make Money?
Net Profit Margin
For every $100 in sales, Formula Systems (1985) Ltd. keeps $2.49 as profit after all expenses.
Operating Margin
Core operations generate 9.18 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $10.03 in profit for every $100 of shareholder equity.
ROA
Formula Systems (1985) Ltd. generates $2.16 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Formula Systems (1985) Ltd. generates limited operating cash flow of $0.00, signaling weaker underlying cash strength.
Free Cash Flow
Formula Systems (1985) Ltd. generates weak or negative free cash flow of $0.00, restricting financial flexibility.
FCF Per Share
Each share generates $0.00 in free cash annually.
FCF Yield
FORTY converts 0.00% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
39.34
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-2.54
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.63
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.63
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.82
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.60
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.10
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.13
vs 25 benchmark
How FORTY Stacks Against Its Sector Peers
| Metric | FORTY Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 39.34 | 34.79 | Worse (Expensive) |
| ROE | 10.03% | 1185.00% | Weak |
| Net Margin | 2.49% | -133093.00% (disorted) | Weak |
| Debt/Equity | 0.82 | 0.43 | Weak (High Leverage) |
| Current Ratio | 1.60 | 4.90 | Neutral |
| ROA | 2.16% | -324805.00% (disorted) | Weak |
FORTY outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
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
60.88%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
-14.64%
Industry Style: Growth, Innovation, High Beta
DecliningFCF CAGR
64.22%
Industry Style: Growth, Innovation, High Beta
High Growth