MAGIC SOFTWARE ENTERPRISES (MGIC) Stock Fundamental Analysis
USA - NASDAQ:MGIC - IL0010823123 - Common Stock
24.01 USD
-0.16 (-0.66%)
Overall MGIC gets a fundamental rating of 5 out of 10. We evaluated MGIC against 281 industry peers in the Software industry. MGIC scores excellent on profitability, but there are some minor concerns on its financial health. MGIC has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
MGIC had positive earnings in the past year.
In the past year MGIC had a positive cash flow from operations.
In the past 5 years MGIC has always been profitable.
In the past 5 years MGIC always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.16%, MGIC is in the better half of the industry, outperforming 78.65% of the companies in the same industry.
The Return On Equity of MGIC (13.92%) is better than 81.14% of its industry peers.
Looking at the Return On Invested Capital, with a value of 13.66%, MGIC belongs to the top of the industry, outperforming 90.39% of the companies in the same industry.
MGIC had an Average Return On Invested Capital over the past 3 years of 13.11%. This is in line with the industry average of 11.92%.
The 3 year average ROIC (13.11%) for MGIC is below the current ROIC(13.66%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.16% | ||
| ROE | 13.92% | ||
| ROIC | 13.66% |
ROA(3y)7.32%
ROA(5y)6.74%
ROE(3y)14.22%
ROE(5y)12.72%
ROIC(3y)13.11%
ROIC(5y)11.98%
1.3 Margins
MGIC has a better Profit Margin (6.64%) than 68.68% of its industry peers.
In the last couple of years the Profit Margin of MGIC has remained more or less at the same level.
MGIC's Operating Margin of 10.94% is fine compared to the rest of the industry. MGIC outperforms 75.09% of its industry peers.
MGIC's Operating Margin has been stable in the last couple of years.
The Gross Margin of MGIC (28.38%) is worse than 77.94% of its industry peers.
In the last couple of years the Gross Margin of MGIC has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.94% | ||
| PM (TTM) | 6.64% | ||
| GM | 28.38% |
OM growth 3Y0.56%
OM growth 5Y1.28%
PM growth 3Y2.55%
PM growth 5Y1.42%
GM growth 3Y1.05%
GM growth 5Y-1.84%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), MGIC is creating some value.
The number of shares outstanding for MGIC remains at a similar level compared to 1 year ago.
Compared to 5 years ago, MGIC has more shares outstanding
Compared to 1 year ago, MGIC has an improved debt to assets ratio.
2.2 Solvency
MGIC has a debt to FCF ratio of 1.92. This is a very positive value and a sign of high solvency as it would only need 1.92 years to pay back of all of its debts.
The Debt to FCF ratio of MGIC (1.92) is better than 69.04% of its industry peers.
MGIC has a Debt/Equity ratio of 0.23. This is a healthy value indicating a solid balance between debt and equity.
MGIC has a Debt to Equity ratio (0.23) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.92 | ||
| Altman-Z | N/A |
ROIC/WACC1.53
WACC8.91%
2.3 Liquidity
A Current Ratio of 1.61 indicates that MGIC should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.61, MGIC is in line with its industry, outperforming 50.53% of the companies in the same industry.
A Quick Ratio of 1.61 indicates that MGIC should not have too much problems paying its short term obligations.
MGIC has a Quick ratio of 1.61. This is comparable to the rest of the industry: MGIC outperforms 51.96% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.61 | ||
| Quick Ratio | 1.61 |
3. Growth
3.1 Past
MGIC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.52%.
The Earnings Per Share has been growing by 10.14% on average over the past years. This is quite good.
The Revenue has grown by 12.07% in the past year. This is quite good.
Measured over the past years, MGIC shows a quite strong growth in Revenue. The Revenue has been growing by 11.18% on average per year.
EPS 1Y (TTM)6.52%
EPS 3Y0%
EPS 5Y10.14%
EPS Q2Q%8.33%
Revenue 1Y (TTM)12.07%
Revenue growth 3Y4.81%
Revenue growth 5Y11.18%
Sales Q2Q%11.3%
3.2 Future
Based on estimates for the next years, MGIC will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.10% on average per year.
The Revenue is expected to grow by 7.56% on average over the next years.
EPS Next Y13.94%
EPS Next 2Y11.61%
EPS Next 3Y10.1%
EPS Next 5YN/A
Revenue Next Year10.63%
Revenue Next 2Y8.41%
Revenue Next 3Y7.56%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 24.50 indicates a rather expensive valuation of MGIC.
69.04% of the companies in the same industry are more expensive than MGIC, based on the Price/Earnings ratio.
MGIC's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.34.
The Price/Forward Earnings ratio is 20.50, which indicates a rather expensive current valuation of MGIC.
Based on the Price/Forward Earnings ratio, MGIC is valued a bit cheaper than the industry average as 72.24% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 34.43. MGIC is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.5 | ||
| Fwd PE | 20.5 |
4.2 Price Multiples
84.70% of the companies in the same industry are more expensive than MGIC, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, MGIC is valued a bit cheaper than 77.58% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.07 | ||
| EV/EBITDA | 14.94 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of MGIC may justify a higher PE ratio.
PEG (NY)1.76
PEG (5Y)2.42
EPS Next 2Y11.61%
EPS Next 3Y10.1%
5. Dividend
5.1 Amount
MGIC has a Yearly Dividend Yield of 2.71%. Purely for dividend investing, there may be better candidates out there.
MGIC's Dividend Yield is rather good when compared to the industry average which is at 41.10. MGIC pays more dividend than 95.37% of the companies in the same industry.
MGIC's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.71% |
5.2 History
The dividend of MGIC decreases each year by -7.77%.
MGIC has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-7.77%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
97.86% of the earnings are spent on dividend by MGIC. This is not a sustainable payout ratio.
DP97.86%
EPS Next 2Y11.61%
EPS Next 3Y10.1%
NASDAQ:MGIC (11/13/2025, 1:29:42 PM)
24.01
-0.16 (-0.66%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners20.34%
Inst Owner Change-3.84%
Ins Owners0.39%
Ins Owner ChangeN/A
Market Cap1.18B
Revenue(TTM)585.00M
Net Income(TTM)38.83M
Analysts80
Price Target18.36 (-23.53%)
Short Float %0.83%
Short Ratio6.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.71% |
Yearly Dividend0.2
Dividend Growth(5Y)-7.77%
DP97.86%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.32%
Min EPS beat(2)-5%
Max EPS beat(2)2.37%
EPS beat(4)1
Avg EPS beat(4)-3.64%
Min EPS beat(4)-8.15%
Max EPS beat(4)2.37%
EPS beat(8)3
Avg EPS beat(8)-0.61%
EPS beat(12)6
Avg EPS beat(12)0.86%
EPS beat(16)9
Avg EPS beat(16)0.96%
Revenue beat(2)2
Avg Revenue beat(2)1.07%
Min Revenue beat(2)0.24%
Max Revenue beat(2)1.9%
Revenue beat(4)4
Avg Revenue beat(4)1.46%
Min Revenue beat(4)0.24%
Max Revenue beat(4)1.96%
Revenue beat(8)7
Avg Revenue beat(8)0.59%
Revenue beat(12)9
Avg Revenue beat(12)0.34%
Revenue beat(16)13
Avg Revenue beat(16)1.44%
PT rev (1m)0%
PT rev (3m)12.5%
EPS NQ rev (1m)0%
EPS NQ rev (3m)9.18%
EPS NY rev (1m)0%
EPS NY rev (3m)5%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.28%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.5 | ||
| Fwd PE | 20.5 | ||
| P/S | 2.02 | ||
| P/FCF | 23.07 | ||
| P/OCF | 21.43 | ||
| P/B | 4.23 | ||
| P/tB | 22.24 | ||
| EV/EBITDA | 14.94 |
EPS(TTM)0.98
EY4.08%
EPS(NY)1.17
Fwd EY4.88%
FCF(TTM)1.04
FCFY4.33%
OCF(TTM)1.12
OCFY4.67%
SpS11.91
BVpS5.68
TBVpS1.08
PEG (NY)1.76
PEG (5Y)2.42
Graham Number11.19
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.16% | ||
| ROE | 13.92% | ||
| ROCE | 16.98% | ||
| ROIC | 13.66% | ||
| ROICexc | 13.66% | ||
| ROICexgc | 34.1% | ||
| OM | 10.94% | ||
| PM (TTM) | 6.64% | ||
| GM | 28.38% | ||
| FCFM | 8.74% |
ROA(3y)7.32%
ROA(5y)6.74%
ROE(3y)14.22%
ROE(5y)12.72%
ROIC(3y)13.11%
ROIC(5y)11.98%
ROICexc(3y)16.21%
ROICexc(5y)15.22%
ROICexgc(3y)67.44%
ROICexgc(5y)59.59%
ROCE(3y)16.4%
ROCE(5y)15.06%
ROICexgc growth 3Y-19.18%
ROICexgc growth 5Y-1.06%
ROICexc growth 3Y-5.55%
ROICexc growth 5Y3.96%
OM growth 3Y0.56%
OM growth 5Y1.28%
PM growth 3Y2.55%
PM growth 5Y1.42%
GM growth 3Y1.05%
GM growth 5Y-1.84%
F-Score5
Asset Turnover1.08
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.92 | ||
| Debt/EBITDA | 0.76 | ||
| Cap/Depr | 17.73% | ||
| Cap/Sales | 0.67% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 63.95% | ||
| Profit Quality | 131.6% | ||
| Current Ratio | 1.61 | ||
| Quick Ratio | 1.61 | ||
| Altman-Z | N/A |
F-Score5
WACC8.91%
ROIC/WACC1.53
Cap/Depr(3y)27.17%
Cap/Depr(5y)29.68%
Cap/Sales(3y)1%
Cap/Sales(5y)1.12%
Profit Quality(3y)161.93%
Profit Quality(5y)160.05%
High Growth Momentum
Growth
EPS 1Y (TTM)6.52%
EPS 3Y0%
EPS 5Y10.14%
EPS Q2Q%8.33%
EPS Next Y13.94%
EPS Next 2Y11.61%
EPS Next 3Y10.1%
EPS Next 5YN/A
Revenue 1Y (TTM)12.07%
Revenue growth 3Y4.81%
Revenue growth 5Y11.18%
Sales Q2Q%11.3%
Revenue Next Year10.63%
Revenue Next 2Y8.41%
Revenue Next 3Y7.56%
Revenue Next 5YN/A
EBIT growth 1Y15.77%
EBIT growth 3Y5.4%
EBIT growth 5Y12.6%
EBIT Next Year12.62%
EBIT Next 3Y9.21%
EBIT Next 5YN/A
FCF growth 1Y-32.06%
FCF growth 3Y21.95%
FCF growth 5Y11.86%
OCF growth 1Y-32.01%
OCF growth 3Y19.75%
OCF growth 5Y10.29%
MAGIC SOFTWARE ENTERPRISES / MGIC FAQ
Can you provide the ChartMill fundamental rating for MAGIC SOFTWARE ENTERPRISES?
ChartMill assigns a fundamental rating of 5 / 10 to MGIC.
What is the valuation status for MGIC stock?
ChartMill assigns a valuation rating of 5 / 10 to MAGIC SOFTWARE ENTERPRISES (MGIC). This can be considered as Fairly Valued.
What is the profitability of MGIC stock?
MAGIC SOFTWARE ENTERPRISES (MGIC) has a profitability rating of 7 / 10.
Can you provide the PE and PB ratios for MGIC stock?
The Price/Earnings (PE) ratio for MAGIC SOFTWARE ENTERPRISES (MGIC) is 24.5 and the Price/Book (PB) ratio is 4.23.
Can you provide the expected EPS growth for MGIC stock?
The Earnings per Share (EPS) of MAGIC SOFTWARE ENTERPRISES (MGIC) is expected to grow by 13.94% in the next year.