MAGIC SOFTWARE ENTERPRISES (MGIC) Stock Fundamental Analysis
USA - NASDAQ:MGIC - IL0010823123 - Common Stock
20.68 USD
+0.29 (+1.42%)
20.68 USD
0 (0%)
Overall MGIC gets a fundamental rating of 6 out of 10. We evaluated MGIC against 281 industry peers in the Software industry. While MGIC belongs to the best of the industry regarding profitability, 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
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
With a decent Return On Assets value of 7.16%, MGIC is doing good in the industry, outperforming 77.22% of the companies in the same industry.
With an excellent Return On Equity value of 13.92%, MGIC belongs to the best of the industry, outperforming 80.43% of the companies in the same industry.
MGIC has a better Return On Invested Capital (13.66%) than 90.75% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MGIC is in line with the industry average of 11.95%.
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
With a decent Profit Margin value of 6.64%, MGIC is doing good in the industry, outperforming 69.75% of the companies in the same industry.
MGIC's Profit Margin has been stable in the last couple of years.
With a decent Operating Margin value of 10.94%, MGIC is doing good in the industry, outperforming 75.09% of the companies in the same industry.
In the last couple of years the Operating Margin of MGIC has remained more or less at the same level.
The Gross Margin of MGIC (28.38%) is worse than 78.65% 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
MGIC has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for MGIC remains at a similar level compared to 1 year ago.
MGIC has more shares outstanding than it did 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.
MGIC has a Debt to FCF ratio of 1.92. This is in the better half of the industry: MGIC outperforms 67.97% of its industry peers.
A Debt/Equity ratio of 0.23 indicates that MGIC is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.23, MGIC perfoms like the industry average, outperforming 45.55% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.92 | ||
| Altman-Z | N/A |
ROIC/WACC1.44
WACC9.48%
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 comparable to the rest of the industry.
MGIC has a Quick 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 Quick ratio (1.61) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.61 | ||
| Quick Ratio | 1.61 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.52% over the past year.
MGIC shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.14% yearly.
MGIC shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.07%.
MGIC shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.18% yearly.
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
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.
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 Year10.63%
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.
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
Based on the Price/Earnings ratio of 21.10, the valuation of MGIC can be described as rather expensive.
76.87% of the companies in the same industry are more expensive than MGIC, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.86, MGIC is valued a bit cheaper.
A Price/Forward Earnings ratio of 17.66 indicates a rather expensive valuation of MGIC.
Based on the Price/Forward Earnings ratio, MGIC is valued a bit cheaper than 79.36% of the companies in the same industry.
MGIC's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 23.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.1 | ||
| Fwd PE | 17.66 |
4.2 Price Multiples
88.26% 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 80.78% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.87 | ||
| EV/EBITDA | 12.95 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
MGIC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.51
PEG (5Y)2.08
EPS Next 2Y11.61%
EPS Next 3Y10.1%
5. Dividend
5.1 Amount
MGIC has a Yearly Dividend Yield of 2.90%. 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 27.58. MGIC pays more dividend than 97.15% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, MGIC pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.9% |
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%
20.68
+0.29 (+1.42%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners20.34%
Inst Owner Change-3.08%
Ins Owners0.39%
Ins Owner ChangeN/A
Market Cap1.02B
Analysts80
Price Target18.36 (-11.22%)
Short Float %0.69%
Short Ratio4.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.9% |
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)5.94%
EPS NY rev (1m)0%
EPS NY rev (3m)5.53%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)4.29%
Revenue NY rev (1m)0.55%
Revenue NY rev (3m)3.9%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.1 | ||
| Fwd PE | 17.66 | ||
| P/S | 1.74 | ||
| P/FCF | 19.87 | ||
| P/OCF | 18.46 | ||
| P/B | 3.64 | ||
| P/tB | 19.16 | ||
| EV/EBITDA | 12.95 |
EPS(TTM)0.98
EY4.74%
EPS(NY)1.17
Fwd EY5.66%
FCF(TTM)1.04
FCFY5.03%
OCF(TTM)1.12
OCFY5.42%
SpS11.91
BVpS5.68
TBVpS1.08
PEG (NY)1.51
PEG (5Y)2.08
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
WACC9.48%
ROIC/WACC1.44
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%