Formula Systems (1985)

FORTY

Information Technology Services · Technology

Price

$107.30

-0.70 (-0.65%)

Market Cap

$1.65B

Exchange

NASDAQ

Winston Score

Winston is serious

Mixed quality — meaningful strengths and weaknesses.

Share count rising — dilution

+2.5% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 15.4M (2021) → 15.8M (2025)

Formula Systems (1985) Ltd., through its subsidiaries, provides proprietary and non-proprietary software solutions, IT professional services, software product marketing and support, and computer infrastructure and integration solutions worldwide. The company offers computer and telecommunication infrastructure solutions; computer solutions to computer and communications infrastructures; cloud computing solutions; and database and big data services. It also provides customer relations management,

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+3.1% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

>+1,000% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$20M/ year

↓ Declining (-76% vs prior year)

0.8% of revenue

Below sector average (15%)

R&D spend declining — could signal cost-cutting or efficiency

Insider Activity

6.4%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$1.3B cash & investments

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

Formula Systems (1985) is growing revenue at 3% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

19.8%

Thin — 19.8% gross margin

Operating Margin

4.6%

Thin — 4.6% operating margin

ROCE

1.8%

Weak — 1.8% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+5.4%

Slow sales growth (5.4% YoY)

EPS YoY

+657.4%

Earnings growing fast (657.4% YoY)

Earnings growing 25%+ a year. The compounder zone.

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion

Weak — only 0% of profit becomes cash

FCF Margin

0.0%

Thin free cash flow (0.0%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

0.36

Conservative — low debt load (0.36)

Interest Cover

4.67x

Adequate interest coverage (4.7x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

P/E Ratio (TTM)

2.7x

Attractive valuation — P/E 2.7

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward

N/A

not available

Data not available

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Dividends

Dividend Yield

12.14%

Healthy income — 12.14% yield

Yield above 6% — often a flag the market is pricing in a cut.

Dividend Growth

+501.2%

Dividend growing fast (501.2% YoY)

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