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

Why this analysis is different

• A 9-signal quantitative MoonshotScore built from filings, insider activity, and market data — computed from the numbers, not from opinion.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Formula Systems (1985) Ltd. (FORTY) Technology Profile & Competitive Position

Formula Systems (1985) Ltd. provides proprietary and non-proprietary software solutions, IT professional services, and computer infrastructure solutions worldwide. The company's diverse portfolio includes insurance platforms, financial solutions, and consulting services, positioning it as a key player in the global IT services market with a focus on software product marketing and support.

What Is the Investment Thesis for FORTY?

Formula Systems (1985) Ltd. presents a compelling investment case based on its diverse portfolio of software solutions and IT services. The company's strong presence in the insurance and finance sectors, particularly through its Sapiens platform, provides a stable revenue stream. With a market capitalization of $1.68B and a P/E ratio of 2.6, the company's valuation reflects its growth potential. Key catalysts include the expansion of its cloud computing solutions and the increasing demand for its financial and compliance solutions. However, investors may want to evaluate the relatively low profit margin of 2.4% and the debt-to-equity ratio of 40.49% as potential risks. The company's beta of 0.23 suggests lower volatility compared to the market.

Based on FMP financials and quantitative analysis

FORTY Key Highlights

• Market Cap of $1.68B indicates a substantial presence in the IT services market.
• P/E ratio of 2.6 reflects investor expectations of future earnings growth.
• Gross Margin of 24.5% demonstrates the company's ability to generate revenue from its services.
• ROE of 13.6% indicates efficient utilization of equity to generate profits.
• Debt/Equity ratio of 40.49% suggests a moderate level of financial leverage.

Who Are FORTY's Competitors?

FORTY is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are FORTY's Key Strengths?

• Diverse portfolio of software solutions and IT services.
• Strong presence in the insurance and finance sectors.
• Global reach and established customer base.
• Experienced management team.

What Are FORTY's Weaknesses?

• Relatively low profit margin.
• Dependence on specific industries.
• Exposure to currency fluctuations.
• Limited brand recognition compared to larger competitors.

What Could Drive FORTY Stock Higher?

• Launch of new software platforms for the insurance and finance sectors in Q4 2026.
• Expansion of cloud computing solutions to cater to the growing demand for scalable IT solutions.
• Strategic partnerships and acquisitions to expand product portfolio and geographic reach.

What Are the Key Risks for FORTY?

• Intense competition in the IT services industry may erode market share.
• Rapid technological advancements may render existing software solutions obsolete.
• Economic downturns and market volatility may reduce demand for IT services.
• Cybersecurity threats and data breaches may damage reputation and incur financial losses.

What Are the Growth Opportunities for FORTY?

• Expansion of Cloud Computing Solutions: The increasing adoption of cloud computing presents a significant growth opportunity for Formula Systems. By expanding its cloud-based offerings, the company can cater to the growing demand for scalable and cost-effective IT solutions.
• Increased Demand for Financial and Compliance Solutions: The growing complexity of financial regulations and compliance requirements drives the demand for specialized software solutions. Formula Systems can capitalize on this trend by enhancing its Sapiens FinancialPro and Sapiens Financial GO platforms. The financial compliance software market is expected to grow substantially, offering a lucrative opportunity for Formula Systems.
• Strategic Partnerships and Acquisitions: Forming strategic partnerships with other technology companies and acquiring complementary businesses can accelerate Formula Systems' growth. By expanding its product portfolio and geographic reach through partnerships and acquisitions, the company can enhance its competitive position and capture new market opportunities. This strategy can lead to increased market share and revenue growth.
• Focus on Vertical Software Solutions: Developing and marketing vertical software solutions tailored to specific industries can provide a competitive advantage for Formula Systems. By focusing on niche markets and addressing the unique needs of specific industries, the company can differentiate itself from competitors and command higher margins. This approach can lead to increased customer loyalty and recurring revenue streams.
• Leveraging Big Data and Analytics: The increasing availability of big data and the growing demand for data-driven insights present a significant growth opportunity for Formula Systems. By leveraging its expertise in database and data warehouse mining, the company can offer advanced analytics solutions that help customers make better decisions and improve their business performance. The big data analytics market is expected to grow rapidly, providing a substantial addressable market for Formula Systems.

What Opportunities Does FORTY Have?

• Expansion of cloud computing solutions.
• Increased demand for financial and compliance solutions.
• Strategic partnerships and acquisitions.
• Focus on vertical software solutions.

What Threats Does FORTY Face?

• Intense competition in the IT services industry.
• Rapid technological advancements.
• Economic downturns and market volatility.
• Cybersecurity threats and data breaches.

What Are FORTY's Competitive Advantages?

• Proprietary Software: Owns and develops proprietary software solutions, providing a competitive advantage.
• Industry Expertise: Possesses deep industry expertise in the insurance and finance sectors.
• Long-Standing Customer Relationships: Has established long-standing relationships with key customers.
• Global Presence: Operates globally, serving customers in various regions and countries.

What Does FORTY Do?

Incorporated in 1985 and headquartered in Or Yehuda, Israel, Formula Systems (1985) Ltd. has evolved into a global provider of software solutions and IT services. The company operates through its subsidiaries, offering a wide array of proprietary and non-proprietary software solutions, IT professional services, software product marketing and support, and computer infrastructure and integration solutions. Formula Systems delivers computer and telecommunication infrastructure solutions, cloud computing solutions, and database and big data services. Its offerings include customer relations management, computer systems management infrastructures, web world content management, database and data warehouse mining, application integration, database and system, data management, and software development tools, along with professional training courses and advanced professional studies. Formula Systems markets and sells computers and peripheral equipment to business customers. It provides property and casualty insurance platforms like Sapiens, Sapiens CoreSuite, Sapiens IDITSuite, Sapiens PolicyPro, Sapiens BillingPro, Sapiens ClaimsPro, e-Tica, and Tia Enterprise. It also offers life, pension, and annuities platforms, including Sapiens CoreSuite, Sapiens UnderwritingPro, Sapiens ApplicationPro, Sapiens IllustrationPro, and Sapiens ConsolidationMaster. The company's reinsurance software solutions comprise Sapiens ReinsuranceMaster, Sapiens ReinsurancePro, and Sapiens Reinsurance GO, along with the Sapiens platform for workers' compensation solutions. Formula Systems also provides financial and compliance solutions, such as Sapiens FinancialPro, Sapiens Financial GO, and Sapiens StatementPro, and Sapiens DECISION, a decision management platform. Additionally, it offers application development and business process integration platforms, vertical software solutions, strategic consulting and outsourcing services, and professional services, as well as develops on-premise payroll software. With a global presence, Formula Systems caters to diverse industries, leveraging its comprehensive suite of IT solutions and services.

What Products and Services Does FORTY Offer?

• Provides proprietary and non-proprietary software solutions.
• Offers IT professional services to businesses globally.
• Markets and supports software products.
• Delivers computer infrastructure and integration solutions.
• Offers cloud computing solutions and database services.
• Provides specialized platforms for the insurance industry.
• Develops financial and compliance solutions.

How Does FORTY Make Money?

• Software Licensing: Generates revenue through the licensing of its proprietary software solutions.
• IT Services: Provides IT professional services, including consulting, implementation, and support.
• Subscription Services: Offers subscription-based access to its cloud computing solutions and software platforms.
• Product Sales: Markets and sells computers and peripheral equipment to business customers.

What Industry Does FORTY Operate In?

Formula Systems (1985) Ltd. operates in the competitive IT services industry, which is characterized by rapid technological advancements and evolving customer needs. Formula Systems competes with other IT service providers by offering specialized solutions for the insurance and finance sectors. The company's focus on proprietary software solutions and IT professional services differentiates it in the market.

Who Are FORTY's Key Customers?

• Insurance Companies: Provides software platforms and solutions for property and casualty, life, pension, and annuities insurance.
• Financial Institutions: Offers financial and compliance solutions to banks, investment firms, and other financial institutions.
• Businesses: Provides IT services and software solutions to businesses across various industries.
• Government Agencies: Delivers IT solutions and services to government agencies and public sector organizations.

FORTY Valuation & Market Position

With a $1.68B market cap, Formula Systems (1985) Ltd. sits in the small-cap segment of the market. Relative to its peer group, FORTY's quantitative score of 43/100 is below the peer average of 63/100.

ROE 60%Key Financial Metrics

Return on equity for Formula Systems (1985) Ltd. stands at 59.5%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 17.4%, showing how much profit it generates from its asset base. FORTY trades at a trailing price-to-earnings ratio of 2.58, below the Technology sector average of ~36x. Its free cash flow yield is 0.0%, a gauge of the cash the business throws off relative to its market value. A current ratio of 1.67 indicates the company holds enough short-term assets to cover its near-term obligations. Its earnings yield is 38.7%, the inverse of the P/E and a quick read on earnings relative to price.

F-Score 6/9Financial Health

Formula Systems (1985) Ltd.'s Piotroski F-Score is 6/9, a 9-point checklist of profitability, leverage and efficiency — a middling fundamental profile. Its Altman Z-Score of 1.85 places it in the grey zone, a middle ground that warrants monitoring.

FORTY Financials

FORTY Latest News

FORTY Analyst Consensus

FORTY MoonshotScore

Common Questions About FORTY (Technology)

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

Official Resources