Formula Systems (1985) Ltd.
Formula Systems (1985) Ltd. is a prominent entity in the information technology sector, specializing in software development and IT services. As a hub of innovation, the company offers a comprehensive suite of services that includes IT integration, solutions for enterprise resource management, customer relationship management, business intelligence, and project management services. Formula Systems serves a wide array of industries, ranging from the financial sector to healthcare, telecommunications, and public administration, reflecting its versatile application across critical economic areas. Established in 1985, Formula Systems has carved out a significant niche within the Israeli IT market, while also maintaining a strong international presence through its subsidiaries. These strategic extensions bolster the company's capability to deliver specialized and scalable solutions tailored to complex business needs globally. As a component of the technology field, Formula Systems plays a crucial role in facilitating digital transformation and enhancing operational efficiencies for its clients, thereby contributing substantially to technological advancements in various sectors.
ILS 352.00
+ILS 0.30 (+0.09%)
EOD Oct 16, 2026
Operating margin is thin at 7.47%. Limited cushion if revenue slows or costs rise, not the profile of a wide-moat business.
Revenue declined 4.7% YoY. Margins deteriorated 2.1pp alongside, both lines moving the wrong way.
ROIC dropped from 10.20% to 6.51%, capital efficiency is deteriorating.
2.9x earnings, 5.1x FCF. The multiple is below average. Either the market is pricing in deterioration you should investigate, or there's genuine value here.
Price History
Valuation & Multiples
Based on TTM earnings · Diluted shares
Profitability & Returns
Revenue (TTM)
$2.93B
▼ -4.7% YoY
Net Income (TTM)
$698M
▲ +245.3% YoY
Op. Margin
8.54%
▼ -2.1pp YoY
ROIC
6.51%
▼ -3.7pp YoY
Cash Flow & Balance Sheet
FCF (FY)
$354M
▲ +19.9% YoY
Op. Cash Flow (FY)
$382M
▲ +22.8% YoY
Net Debt
-$688M
Net Cash Position
Cash & Equiv.
$1.28B
3Y CAGR: +0.7%
3Y CAGR: +21.0%
Continue Research
Is Formula Systems (1985) (FORTY) overvalued?
At a P/E of 2.9 and a price-to-free-cash-flow of 5.1, Formula Systems (1985) (FORTY) trades below a two-stage DCF intrinsic value of about $1,096.51 per share, so at $352.00 the stock looks undervalued (211.5% below estimated intrinsic value). A high multiple is not the same as overvalued: fast-growing, high-quality businesses can deserve a premium. See the general approach in how to tell if a stock is overvalued.
On quality, Formula Systems (1985) scores 71/100 on Intrinsiqq's quality scorecard (a solid business on these measures), weighing growth, margins, returns on capital, share count, and balance-sheet strength. It currently yields about 12.7%; see dividend safety for coverage and history. All figures are computed from company filings; read the full methodology, or see how the market compares in our US profitability statistics. This is analysis, not investment advice.
Frequently asked
What is Formula Systems (1985)'s fair value?+
Intrinsiqq's two-stage DCF estimates an intrinsic value of about $1,096.51 per share for FORTY, projecting its recent free cash flow forward with a growth rate that fades toward a long-run rate and discounting it back to today. Applying a 25% margin of safety gives a more conservative fair-value entry around $822.38. At today's $352.00, that puts the stock about 211.5% below estimated intrinsic value. The result is sensitive to the growth and discount-rate inputs, so it is best to run conservative, base and optimistic cases. You can adjust all of them yourself with the sliders on the DCF tab.
Is Formula Systems (1985) a high-quality business?+
Formula Systems (1985) scores 71 out of 100 on Intrinsiqq's quality score, a weighted blend of 8 metrics each scored 0 to 100, which makes it a solid business on these measures. Recent fundamentals include a 8.5% operating margin and a 6.5% return on invested capital. The score weighs revenue and free-cash-flow growth, operating margins, return on invested capital, share-count change, and balance-sheet strength, all computed from company filings, not opinion. Because valuation only means something relative to quality, the full metric-by-metric breakdown is on the quality scorecard.
Does Formula Systems (1985) (FORTY) pay a dividend, and how much?+
Yes, Formula Systems (1985) pays a regular dividend of about $14.47 per share per year (typically in quarterly installments), a yield of roughly 12.7% at the current price. That is a payout ratio of about 32.8% of earnings, so the dividend is amply covered by earnings. Formula Systems (1985) has grown the dividend at roughly 39.6% a year over the past few years. A low headline yield is not the same as a weak dividend: what matters is how well earnings and free cash flow cover the payout and whether it is growing, not the percentage alone. For FORTY's full payout history, growth streak and dividend-safety score, see the dividends tab.
Is Formula Systems (1985) a good stock to buy right now?+
That depends on valuation and quality together, not either alone. FORTY currently trades below its estimated intrinsic value and scores 71/100 on quality (solid). It also yields about 12.7%. A cheap price is only a bargain if the business is durable, and a premium can be justified by genuine quality, so the two questions, "is it cheap?" and "is it good?", only make sense side by side. Read the valuation against the quality scorecard, run the DCF on your own assumptions, and decide for yourself. This is analysis from company filings, not investment advice.
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Data sourced from company filings and third-party price providers. Scores, valuations, and metrics are algorithmic estimates. This is not investment advice. See our Terms and Methodology.