MAGIC SOFTWARE ENTERPRISES (MGIC) Stock Fundamental Analysis
USA - NASDAQ:MGIC - IL0010823123 - Common Stock
20.81 USD
+0.18 (+0.87%)
20.61 USD
-0.2 (-0.96%)
MGIC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 285 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
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.
MGIC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
MGIC has a better Return On Assets (7.16%) than 77.54% 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 80.70% of the companies in the same industry.
MGIC's Return On Invested Capital of 13.66% is amongst the best of the industry. MGIC outperforms 90.88% of its industry peers.
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 11.88%.
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's Profit Margin of 6.64% is fine compared to the rest of the industry. MGIC outperforms 69.82% of its industry peers.
MGIC's Profit Margin has been stable in the last couple of years.
MGIC has a Operating Margin of 10.94%. This is in the better half of the industry: MGIC outperforms 75.44% of its industry peers.
MGIC's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 28.38%, MGIC is doing worse than 78.25% of the companies in the same industry.
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.
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
The Debt to FCF ratio of MGIC is 1.92, which is an excellent value as it means it would take MGIC, only 1.92 years of fcf income to pay off all of its debts.
MGIC's Debt to FCF ratio of 1.92 is fine compared to the rest of the industry. MGIC outperforms 68.77% 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's Debt to Equity ratio of 0.23 is in line compared to the rest of the industry. MGIC outperforms 45.61% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.92 | ||
| Altman-Z | N/A |
ROIC/WACC1.49
WACC9.18%
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.
Looking at the Current ratio, with a value of 1.61, MGIC is in line with its industry, outperforming 50.88% 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 51.93% of its industry peers.
| 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.
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
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 7.56% 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
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
A Price/Earnings ratio of 21.23 indicates a rather expensive valuation of MGIC.
Based on the Price/Earnings ratio, MGIC is valued a bit cheaper than the industry average as 74.74% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 26.76, MGIC is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 17.77, the valuation of MGIC can be described as rather expensive.
Based on the Price/Forward Earnings ratio, MGIC is valued a bit cheaper than the industry average as 77.89% of the companies are valued more expensively.
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 | 21.23 | ||
| Fwd PE | 17.77 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MGIC indicates a rather cheap valuation: MGIC is cheaper than 86.32% of the companies listed in the same industry.
MGIC's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. MGIC is cheaper than 78.60% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20 | ||
| EV/EBITDA | 13.02 |
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)1.52
PEG (5Y)2.09
EPS Next 2Y11.61%
EPS Next 3Y10.1%
5. Dividend
5.1 Amount
MGIC has a Yearly Dividend Yield of 2.93%.
Compared to an average industry Dividend Yield of 34.34, MGIC pays a better dividend. On top of this MGIC pays more dividend than 97.19% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.31, MGIC pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.93% |
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%
20.81
+0.18 (+0.87%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners20.34%
Inst Owner Change0.02%
Ins Owners0.39%
Ins Owner ChangeN/A
Market Cap1.02B
Revenue(TTM)585.00M
Net Income(TTM)38.83M
Analysts80
Price Target18.36 (-11.77%)
Short Float %0.83%
Short Ratio6.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.93% |
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 | 21.23 | ||
| Fwd PE | 17.77 | ||
| P/S | 1.75 | ||
| P/FCF | 20 | ||
| P/OCF | 18.58 | ||
| P/B | 3.66 | ||
| P/tB | 19.28 | ||
| EV/EBITDA | 13.02 |
EPS(TTM)0.98
EY4.71%
EPS(NY)1.17
Fwd EY5.63%
FCF(TTM)1.04
FCFY5%
OCF(TTM)1.12
OCFY5.38%
SpS11.91
BVpS5.68
TBVpS1.08
PEG (NY)1.52
PEG (5Y)2.09
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
WACC9.18%
ROIC/WACC1.49
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 6 / 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 21.23 and the Price/Book (PB) ratio is 3.66.
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.