Formula Systems (1985) Ltd. (FORTY) AI Stock Analysis

Formula Systems (1985) Ltd., based in Or Yehuda, Israel, operates globally through its subsidiaries, providing proprietary and non-proprietary software solutions, IT professional services, software product marketing, support, and computer infrastructure integration. Founded in 1985, the company delivers cloud computing, telecommunications infrastructure, database management, and big data analytics. It also offers corporate computer hardware, alongside insurance platforms including Sapiens CoreSuite, Sapiens IDITSuite, and Sapiens PolicyPro for property and casualty, life, and reinsurance sectors. Additionally, Formula Systems markets financial and compliance platforms such as Sapiens FinancialPro and Sapiens DECISION, while providing application development, business process integration, and strategic consulting.

Formula Systems expanded annual revenue from $2.40B in FY2021 to $2.61B in FY2023, before revenue fell 14.7% to $2.23B in FY2024. In FY2025, revenue rebounded 18.8% to $2.65B, representing a 5-year CAGR of 6.5% from FY2020. Gross margin stood at 23.5% in FY2021 and shifted to 17.0% in FY2025, while operating margin moderated from 8.7% to 7.1%. Net income was $28.4M with an EPS of $38.54 in FY2025. Over the trailing twelve months ended June 30, 2026, revenue reached $2.93B with an operating margin of 9.2%. For the latest quarter ended June 30, 2026, quarterly revenue grew 5.3% year-over-year, and quarterly earnings grew 54.7%.

As of June 30, 2026, Formula Systems held $864.5M in cash and short-term investments against total debt of $670.6M, resulting in net cash of $193.9M. Total assets reached $3.51B and shareholders' equity was $1.21B, yielding a debt-to-equity ratio of 0.56 and a current ratio of 1.48. In FY2025, operating cash flow reached $391.1M and free cash flow was $374.8M. Cash uses in FY2025 included capital expenditures of $16.3M and dividends paid of $28.9M.

Formula Systems closed at $112.11 on October 15, 2026, with a market cap of $1.76B and an enterprise value of $1.56B. The stock trades at a trailing P/E of 24.3x, below the 28.1x median of its US-listed Technology peers. Its forward P/E of 9.2x, price-to-sales of 0.6x, and EV/EBITDA of 6.7x also sit below peer medians of 18.8x, 2.8x, and 16.6x, respectively. Over the past year, the stock returned -12.7% compared to 17.3% for the S&P 500 (SPY), and over five years returned 23.8% versus 85.1% for the index.

Formula Systems pays an annual forward dividend of $2.15, corresponding to a dividend yield of 1.88% and a payout ratio of 37.9%. The company has paid dividends for 14 consecutive years, delivering an annualized 5-year dividend growth rate of 35.7%. Its last ex-dividend date was September 22, 2026.

Formula Systems beat EPS estimates in all 4 of its last 4 quarters. The company does not list consensus analyst ratings or price targets, but its trailing twelve months EPS stands at $4.72. Investors can look toward its next quarterly earnings announcement, which is scheduled for November 19, 2026.

This page is an AI-written research summary of Formula Systems (1985) Ltd. (FORTY). The text was generated on October 30, 2026 from Quotelinks data as of October 15, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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