Magic Software Enterprises Ltd. (MGIC)
For informational purposes only. Not financial advice. Analysis by Sedat ANAK, Founder & Editor-in-Chief | AI-powered analysis. Data sourced from SEC filings and institutional-grade financial providers. Editorially reviewed. Not financial advice.
Magic Software Enterprises Ltd. (MGIC) trades at $17.38 with AI Score 45/100 (Grade C). Magic Software Enterprises Ltd. provides application development, business process integration, and IT outsourcing services. Market cap: $853.35M, Sector: Technology.
Price live · AI analysis from May 9, 2026MGIC stock analysis for 2026: Analysts have set a consensus price target of $18.00 for Magic Software Enterprises Ltd., suggesting 3.6% upside from the current price of $17.38. The AI MoonshotScore is 45/100, indicating a neutral outlook. Key factors: analyst coverage, AI-driven quantitative scoring.
MGIC: the 1 perspectives are evenly split.
How is this calculated? →Magic Software Enterprises Ltd. (MGIC) Technology Profile & Competitive Position
Magic Software Enterprises Ltd. delivers application development, business process integration, and IT outsourcing solutions globally. Specializing in proprietary application platforms and vertical software, the company caters to diverse sectors, with a focus on innovation and comprehensive IT service offerings, maintaining a significant presence in Israel.
What Is the Investment Thesis for MGIC?
Magic Software Enterprises Ltd. presents a compelling investment case based on its diverse portfolio of application development and IT outsourcing solutions. With a market capitalization of $853.35M and a P/E ratio of 21.3, the company demonstrates solid financial footing. A dividend yield of 2.57% offers investors an income stream. Key growth catalysts include the expansion of its vertical software solutions and the increasing demand for business process integration services. The company's beta of 0.75 suggests lower volatility compared to the market. However, investors should monitor the competitive landscape and the company's ability to maintain its profit margin of 6.6% and gross margin of 28.0% amidst evolving technology trends.
Based on FMP financials and quantitative analysis
MGIC Key Highlights
- Market capitalization of $853.35M indicates a strong valuation in the IT services sector.
- P/E ratio of 21.3 reflects investor confidence in the company's earnings potential.
- Dividend yield of 2.57% provides a steady income stream for investors.
- Gross margin of 28.0% demonstrates the company's ability to maintain profitability in its service offerings.
- Beta of 0.75 suggests lower volatility compared to the broader market, making it a potentially stable investment.
Who Are MGIC's Competitors?
MGIC is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.
| Company | Price | Change | Market Cap | AI Score |
|---|---|---|---|---|
| INFY Infosys Limited | $11.02 | -1.30% | $44.69B | 50 |
| ACN Accenture plc | $137.29 | -0.04% | $84.01B | 79 |
| IBM International Business Machines Corporation | $298.01 | +2.93% | $280.10B | 60 |
| IAIC Information Analysis Incorporated | $4.28 | +12.34% | $81.86M | 66 |
| DVLT Datavault AI Inc. | $0.38 | -1.22% | $107.35M | 65 |
| NYAX Nayax Ltd. | $71.97 | +2.49% | $2.63B | 62 |
| TSYHF TravelSky Technology Limited | $1.03 | -2.81% | $3.03B | 60 |
| CCRC China Customer Relations Centers, Inc. | $6.50 | +0.31% | 51 |
AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance
What Are MGIC's Key Strengths?
- Proprietary application development platforms.
- Diverse portfolio of vertical software solutions.
- Established presence in Israel and international markets.
- Comprehensive IT service offerings.
What Are MGIC's Weaknesses?
- Relatively small market capitalization compared to major competitors.
- Profit margin could be improved.
- Dependence on specific vertical markets.
- Limited brand recognition compared to larger IT service providers.
What Could Drive MGIC Stock Higher?
- Launch of new cloud-based versions of existing software platforms, expected in Q3 2026.
- Increasing demand for business process integration solutions driven by digital transformation initiatives.
- Expansion of vertical software solutions into new healthcare and logistics markets.
What Are the Key Risks for MGIC?
- Intense competition from larger IT service providers with greater resources.
- Rapid technological advancements may render existing software platforms obsolete.
- Economic downturns could reduce IT spending and impact revenue.
- Cybersecurity threats and data privacy concerns could damage the company's reputation and financial performance.
What Are the Growth Opportunities for MGIC?
- Expansion of Vertical Software Solutions: Magic Software can drive growth by further developing and marketing its vertical software solutions like Clicks for healthcare and Hermes Cargo for air cargo management. The healthcare IT market, for example, is projected to reach hundreds of billions of dollars by 2026, presenting a significant opportunity for Magic Software to increase its market share through specialized solutions. Success in these niche markets can drive revenue growth and enhance the company's reputation as a provider of tailored IT solutions.
- Increased Adoption of Business Process Integration: The demand for business process integration (BPI) solutions is growing as organizations seek to streamline operations and improve efficiency. Magic Software's Magic xpi platform positions it to capitalize on this trend. The global BPI market is expected to expand significantly, driven by the need for seamless data exchange and workflow automation. By enhancing and promoting its BPI capabilities, Magic Software can attract new clients and expand its service offerings to existing customers.
- Strategic Partnerships and Alliances: Forming strategic partnerships with other technology providers and industry players can expand Magic Software's reach and capabilities. Collaborations with cloud service providers, cybersecurity firms, and other IT specialists can create synergistic opportunities and allow Magic Software to offer more comprehensive solutions. These partnerships can also facilitate entry into new markets and enhance the company's competitive position. The timeline for realizing benefits from strategic alliances is typically within 1-3 years.
- Geographic Expansion into Emerging Markets: Expanding its presence in emerging markets can provide Magic Software with new growth opportunities. Regions like Southeast Asia and Latin America are experiencing rapid economic growth and increasing demand for IT services. By establishing a foothold in these markets, Magic Software can tap into new customer bases and diversify its revenue streams. This expansion strategy requires careful planning and investment, but the potential rewards are substantial in terms of long-term growth.
- Focus on Cloud-Based Solutions: As more organizations migrate to the cloud, Magic Software can drive growth by offering cloud-based versions of its application platforms and vertical software solutions. Cloud solutions provide scalability, flexibility, and cost savings, making them attractive to businesses of all sizes. By investing in cloud technologies and developing cloud-native applications, Magic Software can meet the evolving needs of its customers and maintain a competitive edge. The transition to cloud-based solutions is an ongoing trend with significant long-term potential.
What Opportunities Does MGIC Have?
- Expansion into emerging markets.
- Increased adoption of cloud-based solutions.
- Strategic partnerships with technology providers.
- Growing demand for business process integration.
What Threats Does MGIC Face?
- Intense competition in the IT services industry.
- Rapid technological advancements and platform shifts.
- Economic downturns affecting IT spending.
- Cybersecurity threats and data privacy concerns.
What Are MGIC's Competitive Advantages?
- Proprietary Technology: Ownership of application platforms like Magic xpa and Magic xpi creates a technological advantage.
- Vertical Software Solutions: Specialized software for specific industries provides a competitive edge in niche markets.
- Established Customer Base: Long-term relationships with clients across various sectors contribute to recurring revenue.
- Integrated Service Offerings: Combining application development, integration, and IT outsourcing provides comprehensive solutions.
What Does MGIC Do?
Magic Software Enterprises Ltd., founded in 1983 and headquartered in Or Yehuda, Israel, provides a range of proprietary application development, business process integration, and IT outsourcing services. Originally named Mashov Software Export (1983) Ltd., the company rebranded to Magic Software Enterprises Ltd. in 1991. The company operates through two primary segments: Software Services and IT Professional Services. The Software Services segment focuses on developing, marketing, and supporting application platforms, software applications, and business and process integration solutions. The IT Professional Services segment offers IT services including infrastructure design and delivery, application development, technology planning and implementation, communications services, and supplemental outsourcing. Magic Software's proprietary application platforms include Magic xpa for business application development, AppBuilder for high-end application maintenance, Magic xpi for application integration, FactoryEye for production data virtualization, BusinessEye for business intelligence, and Magic SmartUX for mobile business applications. The company also provides vertical software solutions like Clicks for healthcare, Leap for business support systems, Hermes Cargo for air cargo management, HR Pulse as a SaaS tool, MBS Solution for TV broadcast management, Nativ for rehabilitation center management, and Mobisale for consumer goods sales. Magic Software extends its services with software maintenance, support, training, and consulting, serving clients internationally.
What Products and Services Does MGIC Offer?
- Develop proprietary application platforms for business application development.
- Provide business process integration solutions to streamline operations.
- Offer IT outsourcing services to manage clients' IT infrastructure.
- Create vertical software solutions tailored for specific industries like healthcare and logistics.
- Offer software maintenance, support, training, and consulting services.
- Provide solutions for data virtualization and business intelligence.
- Enable cross-platform mobile business applications.
How Does MGIC Make Money?
- Software Licensing: Generating revenue through the licensing of its proprietary application platforms like Magic xpa and Magic xpi.
- IT Professional Services: Providing IT services such as infrastructure design, application development, and technology implementation.
- Subscription Services: Offering software as a service (SaaS) solutions like HR Pulse on a subscription basis.
- Consulting and Training: Earning revenue from consulting services and training programs related to its software products.
What Industry Does MGIC Operate In?
Magic Software Enterprises Ltd. operates within the competitive IT services industry, which is characterized by rapid technological advancements and evolving client needs. The global IT services market is projected to reach trillions of dollars by 2026, driven by digital transformation initiatives and increased cloud adoption. Magic Software competes with both large multinational corporations and niche service providers, differentiating itself through its proprietary application platforms and vertical software solutions. The company's focus on business process integration and IT outsourcing positions it to capitalize on the growing demand for comprehensive IT solutions.
Who Are MGIC's Key Customers?
- Healthcare providers using Clicks software for healthcare management.
- Businesses utilizing Leap software for business support systems.
- Air cargo ground handling companies employing Hermes Cargo for cargo management.
- Consumer goods manufacturers and wholesalers using Mobisale for sales and distribution activities.
- TV broadcast management companies using MBS Solution.
How Magic Software Enterprises Ltd. Is Valued
Magic Software Enterprises Ltd. carries a market capitalization of $853.35M, placing it in the small-cap category. Relative to its peer group, MGIC's quantitative score of 45/100 is below the peer average of 64/100.
ROE 15%Key Financial Metrics
Return on equity for Magic Software Enterprises Ltd. stands at 14.5%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 7.2%, showing how much profit it generates from its asset base. MGIC trades at a trailing price-to-earnings ratio of 21.31, below the Technology sector average of ~38x. Its free cash flow yield is 7.6%, a gauge of the cash the business throws off relative to its market value. A current ratio of 1.48 indicates the company holds enough short-term assets to cover its near-term obligations. Its earnings yield is 4.7%, the inverse of the P/E and a quick read on earnings relative to price.
F-Score 6/9Financial Health
Magic Software Enterprises 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 3.64 places it in the safe zone, indicating low near-term bankruptcy risk.
FY2026 estForward Outlook
Wall Street analysts project Magic Software Enterprises Ltd. revenue of about $657.4M for fiscal 2026, with EPS near $1.16.
MGIC Financials
Fundamental Snapshot
Based on FMP financials and quantitative analysis · FY 2024
Bull Case vs Bear Case
Bull Case
- Recent insider buying suggests confidence in Magic Software's future performance, indicating a belief in its growth potential.
- Community sentiment has turned positive, with discussions highlighting the company's innovative software solutions gaining traction.
- Analysts are noting an increase in partnerships, which could enhance market reach and drive revenue growth.
- Market perception is improving as the company continues to adapt to changing tech trends, positioning itself as a competitive player.
Bear Case
- Some investors express concern over market saturation in the software industry, which could limit Magic Software's growth opportunities.
- Recent social sentiment indicates skepticism about the company's ability to differentiate its products in a crowded marketplace.
- There are ongoing concerns regarding the stability of tech spending, as economic uncertainties may lead to tighter budgets for software solutions.
- A few bearish community views highlight potential challenges in scaling operations effectively, which could impact profitability.
AI-generated arguments based on insider flow, news sentiment and technicals — not financial advice · February 2026
MGIC Latest News
-
Stocks That Hit 52-Week Lows On Thursday
benzinga · Mar 16, 2023
-
Stocks That Hit 52-Week Highs On Friday
· Aug 13, 2021
-
Stocks That Hit 52-Week Highs On Tuesday
· Feb 9, 2021
-
Stocks That Hit 52-Week Highs On Friday
· Jan 24, 2020
MGIC Analyst Consensus
Consensus Rating
Aggregated Buy/Hold/Sell recommendations from Benzinga, Yahoo Finance, and Finnhub for MGIC.
Price Targets
Consensus target: $18.00
MGIC MoonshotScore
What does this score mean?
The MoonshotScore rates MGIC's growth potential on a scale of 0-100 across multiple factors including innovation, market disruption, financial health, and momentum.
Leadership: Yakov Tsaroya
CEO
Yakov Tsaroya serves as the CEO of Magic Software Enterprises Ltd. His background includes extensive experience in the technology sector, with a focus on software development and IT services. He has held various leadership positions within the company, contributing to its strategic direction and growth. His expertise spans across application development, business process integration, and IT outsourcing, making him well-suited to lead Magic Software in a dynamic and competitive market.
Track Record: Under Yakov Tsaroya's leadership, Magic Software Enterprises Ltd. has expanded its portfolio of vertical software solutions and strengthened its presence in international markets. Key milestones include the successful launch of new application platforms and the establishment of strategic partnerships. His focus on innovation and customer satisfaction has contributed to the company's sustained growth and profitability.
Common Questions About MGIC (Technology)
What does Magic Software Enterprises Ltd. do?
Magic Software Enterprises Ltd. is a global provider of application development, business process integration, and IT outsourcing services. The company offers proprietary application platforms, such as Magic xpa and Magic xpi, which enable businesses to develop and deploy applications more efficiently. Additionally, Magic Software provides vertical software solutions tailored for specific industries like healthcare, logistics, and media. The company's comprehensive service offerings and focus on innovation position it as a key player in the IT services market.
What do analysts say about MGIC stock?
Analyst coverage of Magic Software Enterprises Ltd. (MGIC) generally reflects a positive outlook, driven by the company's diverse service offerings and growth potential in the IT services market. Key valuation metrics, such as the P/E ratio of 21.3, suggest that the stock is reasonably valued compared to its peers. Growth considerations include the company's ability to expand its vertical software solutions and capitalize on the increasing demand for business process integration. Investors should conduct their own due diligence and consider their individual risk tolerance before making any investment decisions.
What are the main risks for MGIC?
Magic Software Enterprises Ltd. faces several risks inherent to the IT services industry. Intense competition from larger companies with greater resources poses a significant challenge. Rapid technological advancements could render existing software platforms obsolete, requiring continuous innovation and investment. Economic downturns could reduce IT spending, impacting revenue and profitability. Additionally, cybersecurity threats and data privacy concerns could damage the company's reputation and financial performance. Managing these risks effectively is crucial for Magic Software's long-term success.
What are the key factors to evaluate for MGIC?
Magic Software Enterprises Ltd. (MGIC) holds an AI score of 45/100 (low). P/E: 21.3x vs the S&P 500's ~20-25x. Analysts target $18.00 (+4%). Not financial advice.
How frequently does MGIC data refresh on this page?
MGIC prices update in real time during U.S. market hours. Fundamentals refresh after quarterly filings; analyst ratings and AI insights update daily; news is aggregated continuously.
What has driven MGIC's recent stock price performance?
Magic Software Enterprises Ltd. (MGIC) moves on earnings results, analyst revisions, sector rotation, and market sentiment. Notable catalyst: Proprietary application development platforms. See the News tab for the latest drivers. Past performance does not predict future results.
Should investors consider MGIC overvalued or undervalued right now?
Magic Software Enterprises Ltd. (MGIC) trades at 21.3x earnings. Analysts target $18.00 (+4%) — near fair value. Compare P/E, P/S, and EV/EBITDA against sector peers for a full view.
What research should beginners do before buying MGIC?
Before investing in Magic Software Enterprises Ltd. (MGIC), research these four areas: (1) the company's revenue model and competitive position (see Company Overview), (2) financial health through revenue growth, margins, and cash flow (see MoonshotScore), (3) what Wall Street analysts recommend and their price targets (see Analyst tab), and (4) specific risk factors that could impact the stock (see Risk Factors section).
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
Data provided for informational purposes only.
- Information is based on available data as of 2026-05-09.
- Financial metrics are based on the most recent reporting period.