MAGIC SOFTWARE ENTERPRISES (MGIC) Stock Fundamental Analysis
NASDAQ:MGIC - IL0010823123 - Common Stock
19.57 USD
+0.09 (+0.46%)
Taking everything into account, MGIC scores 6 out of 10 in our fundamental rating. MGIC was compared to 280 industry peers in the Software industry. MGIC has an excellent profitability rating, but there are some minor concerns on its financial health. MGIC has a correct valuation and a medium 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.
MGIC had positive earnings in each of the past 5 years.
Each year in the past 5 years MGIC had a positive operating cash flow.
1.2 Ratios
MGIC's Return On Assets of 7.16% is fine compared to the rest of the industry. MGIC outperforms 76.43% of its industry peers.
Looking at the Return On Equity, with a value of 13.92%, MGIC belongs to the top of the industry, outperforming 80.36% of the companies in the same industry.
With an excellent Return On Invested Capital value of 13.66%, MGIC belongs to the best of the industry, outperforming 91.07% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for MGIC is in line with the industry average of 12.00%.
The last Return On Invested Capital (13.66%) for MGIC is above the 3 year average (13.11%), which is a sign of increasing profitability.
| 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
The Profit Margin of MGIC (6.64%) is better than 71.07% of its industry peers.
MGIC's Profit Margin has been stable in the last couple of years.
MGIC's Operating Margin of 10.94% is fine compared to the rest of the industry. MGIC outperforms 75.71% of its industry peers.
MGIC's Operating Margin has been stable in the last couple of years.
MGIC has a Gross Margin of 28.38%. This is in the lower half of the industry: MGIC underperforms 78.57% 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so MGIC is still creating some value.
Compared to 1 year ago, MGIC has about the same amount of shares outstanding.
The number of shares outstanding for MGIC has been increased compared to 5 years ago.
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.
Looking at the Debt to FCF ratio, with a value of 1.92, MGIC is in the better half of the industry, outperforming 67.86% of the companies in the same industry.
A Debt/Equity ratio of 0.23 indicates that MGIC is not too dependend on debt financing.
MGIC has a Debt to Equity ratio (0.23) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.92 | ||
| Altman-Z | N/A |
ROIC/WACC1.5
WACC9.09%
2.3 Liquidity
MGIC has a Current Ratio of 1.61. This is a normal value and indicates that MGIC is financially healthy and should not expect problems in meeting its short term obligations.
MGIC has a Current ratio (1.61) which is in line with its industry peers.
A Quick Ratio of 1.61 indicates that MGIC should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.61, MGIC perfoms like the industry average, outperforming 51.79% of the companies in the same industry.
| 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.
Looking at the last year, MGIC shows a quite strong growth in Revenue. The Revenue has grown by 12.07% in the last year.
The Revenue has been growing by 11.18% on average over the past years. This is quite good.
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.
MGIC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.56% yearly.
EPS Next Y13.94%
EPS Next 2Y11.61%
EPS Next 3Y10.1%
EPS Next 5YN/A
Revenue Next Year10.03%
Revenue Next 2Y8.41%
Revenue Next 3Y7.56%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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
The Price/Earnings ratio is 19.97, which indicates a rather expensive current valuation of MGIC.
Based on the Price/Earnings ratio, MGIC is valued a bit cheaper than the industry average as 77.50% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of MGIC to the average of the S&P500 Index (27.03), we can say MGIC is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 16.71, the valuation of MGIC can be described as correct.
MGIC's Price/Forward Earnings ratio is rather cheap when compared to the industry. MGIC is cheaper than 82.14% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of MGIC to the average of the S&P500 Index (22.63), we can say MGIC is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.97 | ||
| Fwd PE | 16.71 |
4.2 Price Multiples
88.57% 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 82.14% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.8 | ||
| EV/EBITDA | 12.31 |
4.3 Compensation for Growth
MGIC's 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)1.43
PEG (5Y)1.97
EPS Next 2Y11.61%
EPS Next 3Y10.1%
5. Dividend
5.1 Amount
MGIC has a Yearly Dividend Yield of 2.89%.
Compared to an average industry Dividend Yield of 59.44, MGIC pays a better dividend. On top of this MGIC pays more dividend than 97.14% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, MGIC pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.89% |
5.2 History
The dividend of MGIC decreases each year by -7.77%.
MGIC has paid a dividend for at least 10 years, which is 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 (9/4/2025, 8:22:09 PM)
19.57
+0.09 (+0.46%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners26.5%
Inst Owner Change-3.08%
Ins Owners0.39%
Ins Owner ChangeN/A
Market Cap960.89M
Analysts80
Price Target18.36 (-6.18%)
Short Float %1.54%
Short Ratio6.41
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.89% |
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)12.5%
PT rev (3m)12.5%
EPS NQ rev (1m)9.18%
EPS NQ rev (3m)8.08%
EPS NY rev (1m)5%
EPS NY rev (3m)3.55%
Revenue NQ rev (1m)2.28%
Revenue NQ rev (3m)6.38%
Revenue NY rev (1m)0.53%
Revenue NY rev (3m)3.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.97 | ||
| Fwd PE | 16.71 | ||
| P/S | 1.64 | ||
| P/FCF | 18.8 | ||
| P/OCF | 17.47 | ||
| P/B | 3.44 | ||
| P/tB | 18.13 | ||
| EV/EBITDA | 12.31 |
EPS(TTM)0.98
EY5.01%
EPS(NY)1.17
Fwd EY5.98%
FCF(TTM)1.04
FCFY5.32%
OCF(TTM)1.12
OCFY5.72%
SpS11.91
BVpS5.68
TBVpS1.08
PEG (NY)1.43
PEG (5Y)1.97
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%
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-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
WACC9.09%
ROIC/WACC1.5
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 Year10.03%
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 Year11.26%
EBIT Next 3Y8.83%
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%