Magic Software Enterprises Ltd.
Magic Software Enterprises Ltd. Fundamental Analysis
Magic Software Enterprises Ltd. (MGIC) shows moderate financial fundamentals with a PE ratio of 23.76, profit margin of 6.64%, and ROE of 14.54%. The company generates $0.6B in annual revenue with moderate year-over-year growth of 3.26%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 48.7/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze MGIC's fundamental strength across five key dimensions:
Efficiency Score
WeakMGIC struggles to generate sufficient returns from assets.
Valuation Score
ModerateMGIC shows balanced valuation metrics.
Growth Score
WeakMGIC faces weak or negative growth trends.
Financial Health Score
ExcellentMGIC maintains a strong and stable balance sheet.
Profitability Score
WeakMGIC struggles to sustain strong margins.
Key Financial Metrics
Is MGIC Expensive or Cheap?
P/E Ratio
MGIC trades at 23.76 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, MGIC's PEG of 6.18 indicates potential overvaluation.
Price to Book
The market values Magic Software Enterprises Ltd. at 3.45 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 11.06 times EBITDA. This signals the market has high growth expectations.
How Well Does MGIC Make Money?
Net Profit Margin
For every $100 in sales, Magic Software Enterprises Ltd. keeps $6.64 as profit after all expenses.
Operating Margin
Core operations generate 10.81 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $14.54 in profit for every $100 of shareholder equity.
ROA
Magic Software Enterprises Ltd. generates $7.15 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Magic Software Enterprises Ltd. produces operating cash flow of $66.34M, showing steady but balanced cash generation.
Free Cash Flow
Magic Software Enterprises Ltd. generates strong free cash flow of $64.49M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.31 in free cash annually.
FCF Yield
MGIC converts 6.76% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
23.76
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
6.18
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.45
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.58
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.35
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.48
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.15
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.18
vs 25 benchmark
How MGIC Stacks Against Its Sector Peers
| Metric | MGIC Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 23.76 | 35.19 | Better (Cheaper) |
| ROE | 14.54% | 1155.00% | Weak |
| Net Margin | 6.64% | -127067.00% (disorted) | Weak |
| Debt/Equity | 0.35 | 0.41 | Neutral |
| Current Ratio | 1.48 | 4.71 | Neutral |
| ROA | 7.15% | -314918.00% (disorted) | Weak |
MGIC outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Magic Software Enterprises Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
68.71%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
80.95%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
61.93%
Industry Style: Growth, Innovation, High Beta
High Growth