# Formula Systems (1985) Ltd. American (FORTY) fundamentals

Data as of 2026-09-08. NASDAQ, United States. Sector: Technology / IT Services. Price $129.00, market value $2.0 billion.

## Valuation
- **P/E (trailing): 27.4×** (5-yr avg 15.2×, 3-yr avg 11.2×). Formula Systems (1985) Ltd. American trades at 27.4× trailing earnings, well above its own five-year average of 15.2×: investors are paying up relative to the company's past. The Technology median in the September 2026 study was 32.1×.
- **Price / sales: 0.7×**. Each dollar of revenue is priced at 0.7×, a low multiple typical of thin-margin businesses or out-of-favour stocks.
- **Price / book: 1.6×**. The shares trade at 1.6× book value; book value is a meaningful part of the valuation.
- **EV / EBITDA: 5.2×**. Enterprise value is 5.2× operating earnings before depreciation, the multiple that ignores how the company is financed; below 8× is inexpensive for most sectors.
- **Free-cash-flow yield: 17.9%** (5-yr avg 23.7%). Free cash flow equals 17.9% of the market value, below its five-year average of 23.7%, so the shares are pricier on cash than usual. Above 5% is generally attractive.
- **Earnings yield: 3.7%**. The inverse of the P/E: 3.7% of the price is earned each year.

## Profitability
- **Gross margin: 19.8%**. Formula Systems (1985) Ltd. American keeps 19.8% of revenue after the direct cost of what it sells, a thin margin typical of retail, distribution and commodity businesses.
- **Operating margin: 8.5%**. 8.5% of revenue is left after running the business.
- **Net margin: 23.1%**. 23.1% of each dollar of sales reaches the bottom line.
- **Return on equity: 44.8%**. 44.8% on shareholders' equity is excellent if it is not driven by leverage; sustained above 20% usually signals a competitive advantage.
- **Return on invested capital: 28.9%**. Return on all capital, debt included, is 28.9%: comfortably above what that capital costs.
- **Return on assets: 17.6%**. Each dollar of assets produces 17.6% of profit.

## Growth
- **Revenue growth (1 yr): -4.7%** (3-yr 0.7%/yr, 5-yr 6.3%/yr). Revenue fell 4.7% over the last year, against 6.3% a year compounded over five years: growth is slowing.
- **EPS growth (1 yr): 654.2%** (3-yr 94.6%/yr, 5-yr 66.4%/yr). Earnings per share rose 654.2%, faster than revenue, so margins expanded or the share count shrank.
- **Free-cash-flow growth (3 yr): 17.7%/yr**. Free cash flow has compounded at 17.7% a year over three years, lagging earnings: check whether profits are turning into cash.

## Financial health
- **Debt to equity: 0.44**. Debt is 0.44 times equity: a conservative balance sheet.
- **Net debt / EBITDA: net cash**. Formula Systems (1985) Ltd. American holds more cash than debt.
- **Interest coverage: 5.9×**. Operating profit covers interest 5.9× over, a safe margin.
- **Current ratio: 1.63** (quick 1.61). Current assets cover the next year's liabilities 1.63 times.
- **Altman Z-score: 2.38**. A Z-score of 2.38 is in the grey zone; not distressed, not clearly safe.

## Dividends
- **Dividend yield: 2.07%** ($2.67 per share, trailing). Formula Systems (1985) Ltd. American yields 2.07%, a modest yield more typical of a growth-oriented payer.
- **Payout ratio: 5%** (8% of free cash flow). 5% of earnings goes out as dividends, leaving room to keep raising it.
- **Consecutive years of increases: 2**. 2 straight years of increases.
- **Dividend growth (5 yr): 34.1%/yr** (1-yr 78.8%). The dividend has compounded at 34.1% a year over five years, doubling roughly every 2 years at that pace.
- **Shareholder yield: -2.2%**. Dividends plus net buybacks return -2.2% of the market value a year.

## Price and momentum
- **Total return (1 yr): 6.1%** (YTD -15.1%, 3-mo 2.4%). The shares are up 6.1% over twelve months including dividends.
- **From 52-week high: -32.3%** (26.5% above the low). Trading 32% below its 52-week high, deep in a drawdown.
- **200-day average: above**. The price sits above its 200-day moving average, the usual definition of an uptrend.
- **RSI (14-day): 77**. An RSI of 77 is in overbought territory; short-term pullbacks are common from here.
- **Beta (1 yr): 0.49** (volatility 52%). Beta of 0.49 against the S&P 500: the shares move much less than the market.

Live score and charts: https://foliofundamentals.com/analyzer?s=FORTY · Page: https://foliofundamentals.com/stocks/forty

Not investment advice.