MAGIC SOFTWARE ENTERPRISES (MGIC) Stock Fundamental Analysis
NASDAQ:MGIC - Nasdaq - IL0010823123 - Common Stock - Currency: USD
MGIC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 283 industry peers in the Software industry. MGIC has an excellent profitability rating, but there are some minor concerns on its financial health. MGIC is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year MGIC was profitable.
MGIC had a positive operating cash flow in the past year.
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
MGIC has a better Return On Assets (7.10%) than 77.39% of its industry peers.
Looking at the Return On Equity, with a value of 14.10%, MGIC belongs to the top of the industry, outperforming 80.92% of the companies in the same industry.
MGIC has a Return On Invested Capital of 14.28%. This is amongst the best in the industry. MGIC outperforms 92.23% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MGIC is in line with the industry average of 12.25%.
The 3 year average ROIC (13.11%) for MGIC is below the current ROIC(14.28%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.1% | ||
| ROE | 14.1% | ||
| ROIC | 14.28% |
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 (6.66%) than 72.79% of its industry peers.
In the last couple of years the Profit Margin of MGIC has remained more or less at the same level.
With a decent Operating Margin value of 11.07%, MGIC is doing good in the industry, outperforming 75.62% of the companies in the same industry.
MGIC's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 28.43%, MGIC is doing worse than 78.80% of the companies in the same industry.
MGIC's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.07% | ||
| PM (TTM) | 6.66% | ||
| GM | 28.43% |
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.
Compared to 1 year ago, MGIC has about the same amount of shares outstanding.
Compared to 5 years ago, MGIC has more shares outstanding
The debt/assets ratio for MGIC has been reduced compared to a year ago.
2.2 Solvency
The Debt to FCF ratio of MGIC is 1.42, which is an excellent value as it means it would take MGIC, only 1.42 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.42, MGIC is in the better half of the industry, outperforming 70.67% of the companies in the same industry.
MGIC has a Debt/Equity ratio of 0.20. This is a healthy value indicating a solid balance between debt and equity.
MGIC has a Debt to Equity ratio of 0.20. This is comparable to the rest of the industry: MGIC outperforms 45.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.2 | ||
| Debt/FCF | 1.42 | ||
| Altman-Z | N/A |
ROIC/WACC1.56
WACC9.17%
2.3 Liquidity
MGIC has a Current Ratio of 1.51. This is a normal value and indicates that MGIC is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.51, MGIC is in line with its industry, outperforming 49.12% of the companies in the same industry.
A Quick Ratio of 1.51 indicates that MGIC should not have too much problems paying its short term obligations.
MGIC has a Quick ratio of 1.51. This is comparable to the rest of the industry: MGIC outperforms 49.47% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.51 | ||
| Quick Ratio | 1.51 |
3. Growth
3.1 Past
MGIC shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by 0.00%.
The Earnings Per Share has been growing by 10.14% on average over the past years. This is quite good.
MGIC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.77%.
The Revenue has been growing by 11.18% on average over the past years. This is quite good.
EPS 1Y (TTM)0%
EPS 3Y0%
EPS 5Y10.14%
EPS Q2Q%8.7%
Revenue 1Y (TTM)8.77%
Revenue growth 3Y4.81%
Revenue growth 5Y11.18%
Sales Q2Q%12.71%
3.2 Future
MGIC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.10% yearly.
The Revenue is expected to grow by 7.17% on average over the next years.
EPS Next Y8.51%
EPS Next 2Y9.05%
EPS Next 3Y10.1%
EPS Next 5YN/A
Revenue Next Year9.44%
Revenue Next 2Y7.71%
Revenue Next 3Y7.17%
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 20.33 indicates a rather expensive valuation of MGIC.
Compared to the rest of the industry, the Price/Earnings ratio of MGIC indicates a somewhat cheap valuation: MGIC is cheaper than 74.56% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of MGIC to the average of the S&P500 Index (26.41), we can say MGIC is valued slightly cheaper.
With a Price/Forward Earnings ratio of 17.46, MGIC is valued on the expensive side.
Based on the Price/Forward Earnings ratio, MGIC is valued a bit cheaper than 78.45% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 33.87, MGIC is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.33 | ||
| Fwd PE | 17.46 |
4.2 Price Multiples
86.93% of the companies in the same industry are more expensive than MGIC, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MGIC indicates a rather cheap valuation: MGIC is cheaper than 84.81% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.58 | ||
| EV/EBITDA | 12.58 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of MGIC may justify a higher PE ratio.
PEG (NY)2.39
PEG (5Y)2.01
EPS Next 2Y9.05%
EPS Next 3Y10.1%
5. Dividend
5.1 Amount
MGIC has a Yearly Dividend Yield of 3.25%.
MGIC's Dividend Yield is rather good when compared to the industry average which is at 37.37. MGIC pays more dividend than 97.88% of the companies in the same industry.
MGIC's Dividend Yield is a higher than the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.25% |
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
MGIC pays out 57.99% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP57.99%
EPS Next 2Y9.05%
EPS Next 3Y10.1%
NASDAQ:MGIC (8/11/2025, 8:00:01 PM)
19.52
-0.44 (-2.2%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners26.5%
Inst Owner Change0.15%
Ins Owners0.39%
Ins Owner ChangeN/A
Market Cap958.43M
Analysts80
Price Target16.32 (-16.39%)
Short Float %1.55%
Short Ratio5.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.25% |
Yearly Dividend0.2
Dividend Growth(5Y)-7.77%
DP57.99%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-4.38%
Min EPS beat(2)-5%
Max EPS beat(2)-3.77%
EPS beat(4)0
Avg EPS beat(4)-4.72%
Min EPS beat(4)-8.15%
Max EPS beat(4)-1.96%
EPS beat(8)3
Avg EPS beat(8)-0.46%
EPS beat(12)5
Avg EPS beat(12)-0.28%
EPS beat(16)9
Avg EPS beat(16)1.38%
Revenue beat(2)2
Avg Revenue beat(2)1.1%
Min Revenue beat(2)0.24%
Max Revenue beat(2)1.96%
Revenue beat(4)4
Avg Revenue beat(4)1.15%
Min Revenue beat(4)0.24%
Max Revenue beat(4)1.96%
Revenue beat(8)6
Avg Revenue beat(8)-0.24%
Revenue beat(12)9
Avg Revenue beat(12)0.26%
Revenue beat(16)13
Avg Revenue beat(16)2.06%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.2%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.38%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.43%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.78%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.33 | ||
| Fwd PE | 17.46 | ||
| P/S | 1.68 | ||
| P/FCF | 16.58 | ||
| P/OCF | 15.46 | ||
| P/B | 3.56 | ||
| P/tB | 18.79 | ||
| EV/EBITDA | 12.58 |
EPS(TTM)0.96
EY4.92%
EPS(NY)1.12
Fwd EY5.73%
FCF(TTM)1.18
FCFY6.03%
OCF(TTM)1.26
OCFY6.47%
SpS11.59
BVpS5.48
TBVpS1.04
PEG (NY)2.39
PEG (5Y)2.01
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.1% | ||
| ROE | 14.1% | ||
| ROCE | 17.75% | ||
| ROIC | 14.28% | ||
| ROICexc | 14.28% | ||
| ROICexgc | 37% | ||
| OM | 11.07% | ||
| PM (TTM) | 6.66% | ||
| GM | 28.43% | ||
| FCFM | 10.16% |
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%
ROICexcg growth 3Y-19.18%
ROICexcg 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-Score6
Asset Turnover1.07
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.2 | ||
| Debt/FCF | 1.42 | ||
| Debt/EBITDA | 0.63 | ||
| Cap/Depr | 19.54% | ||
| Cap/Sales | 0.73% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 73.47% | ||
| Profit Quality | 152.4% | ||
| Current Ratio | 1.51 | ||
| Quick Ratio | 1.51 | ||
| Altman-Z | N/A |
F-Score6
WACC9.17%
ROIC/WACC1.56
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)0%
EPS 3Y0%
EPS 5Y10.14%
EPS Q2Q%8.7%
EPS Next Y8.51%
EPS Next 2Y9.05%
EPS Next 3Y10.1%
EPS Next 5YN/A
Revenue 1Y (TTM)8.77%
Revenue growth 3Y4.81%
Revenue growth 5Y11.18%
Sales Q2Q%12.71%
Revenue Next Year9.44%
Revenue Next 2Y7.71%
Revenue Next 3Y7.17%
Revenue Next 5YN/A
EBIT growth 1Y13.14%
EBIT growth 3Y5.4%
EBIT growth 5Y12.6%
EBIT Next Year11.26%
EBIT Next 3Y8.83%
EBIT Next 5YN/A
FCF growth 1Y4.82%
FCF growth 3Y21.95%
FCF growth 5Y11.86%
OCF growth 1Y-0.96%
OCF growth 3Y19.75%
OCF growth 5Y10.29%