Formula Systems (1985) Ltd. (FORTY)
Valuation Overview•Is Formula Systems (1985) Ltd. Overvalued or Undervalued?
Trading at a discount across both intrinsic cash flow and relative peer multiples, indicating a strong margin of safety.
Moderate quality score of 59/100, reflecting stable operating margins and manageable leverage.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: Average quality business weighed down by significant growth concerns.
Wall Street sentiment is generally neutral. However, capital return yields remain modest, anchored by a strong, well-covered dividend yield.
FORTY demonstrates adequate business quality with stable profitability. This is backed by a fortress balance sheet, holding significant net cash ($688M) and minimal debt risk.
The company exhibits steady, low-single-digit revenue growth however, earnings have severely contracted over the same period. Operating efficiency remains adequate with margins around 7.4%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $712.8M | -4.0% | +1.0% | +6.5% | +12.7% | |
| EBITDA | $32.6M | — | -4.4% | — | — | |
| Net Income | $558.2M | -64.4% | -29.6% | — | +3.9% | |
| EPS (Diluted) | $35.25 | -64.6% | -29.8% | -9.8% | +3.2% | |
| Free Cash Flow | $374.8M | +26.8% | +23.3% | +7.7% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 21.0% | 22.1% | 22.8% | 22.7% |
| Operating Margin | 7.4% | 8.7% | 9.1% | 7.8% |
| Net Margin | 21.9% | 2.1% | 2.4% | 2.5% |
| FCF Margin | 13.4% | 11.6% | 10.0% | 8.7% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | — | $2.25 | — | ||
| Q2'26 | — | $2.33 | — | ||
| Q1'26 | — | $0.27 | — | ||
| Q4'25 | — | $0.73 | — | ||
| Q3'25 | — | $0.95 | — | ||
| Q2'25 | — | $1.23 | — | ||
| Q1'25 | — | $1.28 | — | ||
| Q4'24 | — | $1.51 | — |
Total return is +12.7% (1Y), lagging the benchmark by -12.3%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -24.6% | -33.9% | — |
| 1Y | +12.7% | -12.3% | +12.8% |
| 3YCAGR | +17.7% | 0.0% | +20.5% |
| 5YCAGR | +9.6% | -2.3% | +21.9% |
| 10YCAGR | +15.4% | +2.2% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Formula Systems (1985) Ltd. (FORTY) valuation, health, and returns.
Formula Systems (1985) Ltd. is estimated to be undervalued under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. undervalued (implying +291.7% upside to DCF intrinsic value of $442.19)
Formula Systems (1985) Ltd. has multiple valuation anchors: DCF Intrinsic Value: $442.19 | Peer Relative Fair Value: $662.18. A convergence of these signals offers higher conviction.
Formula Systems (1985) Ltd. displays fair financial health with a composite quality score of 59/100, supported by a Altman Z-Score of 1.6 (distress zone), Piotroski F-Score of 5/9, Return on Invested Capital (ROIC) of 10.6%.
Formula Systems (1985) Ltd. pays a 1.7% dividend yield, covered by a 102% payout ratio with 2 years of growth, supplemented by a 0.0% buyback yield.
Formula Systems (1985) Ltd.'s current growth trajectory is Decelerating. The company achieved -4.0% 1Y revenue growth and -64.6% 1Y EPS growth, compared to its 3Y revenue CAGR of +1.0%.
Wall Street consensus is Hold based on 0 analysts. The consensus price target represents a N/A change from current levels.
Investment risks for Formula Systems (1985) Ltd. include: -42.1% 1-year max drawdown, elevated distress risk, stretched payout ratio. Volatility risk is characterized by a beta of 0.51x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.