MAGIC SOFTWARE ENTERPRISES (MGIC) Fundamental Analysis & Valuation

NASDAQ:MGIC • IL0010823123

Current stock price

17.38 USD
-2.02 (-10.41%)
At close:
17.38 USD
0 (0%)
After Hours:

This MGIC fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

7

1. MGIC Profitability Analysis

1.1 Basic Checks

  • MGIC had positive earnings in the past year.
  • MGIC had a positive operating cash flow in the past year.
  • MGIC had positive earnings in each of the past 5 years.
  • In the past 5 years MGIC always reported a positive cash flow from operatings.
MGIC Yearly Net Income VS EBIT VS OCF VS FCFMGIC Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 20M 40M 60M

1.2 Ratios

  • MGIC has a Return On Assets of 7.16%. This is in the better half of the industry: MGIC outperforms 78.62% of its industry peers.
  • With a decent Return On Equity value of 13.92%, MGIC is doing good in the industry, outperforming 79.35% of the companies in the same industry.
  • MGIC has a better Return On Invested Capital (13.66%) than 90.22% of its industry peers.
  • MGIC had an Average Return On Invested Capital over the past 3 years of 13.11%. This is above the industry average of 10.91%.
  • The 3 year average ROIC (13.11%) for MGIC is below the current ROIC(13.66%), indicating increased profibility in the last year.
Industry RankSector 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%
MGIC Yearly ROA, ROE, ROICMGIC Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 5 10 15

1.3 Margins

  • MGIC's Profit Margin of 6.64% is fine compared to the rest of the industry. MGIC outperforms 66.67% of its industry peers.
  • 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 77.54% 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.
  • Looking at the Gross Margin, with a value of 28.38%, MGIC is doing worse than 80.07% of the companies in the same industry.
  • MGIC's Gross Margin has declined in the last couple of years.
Industry RankSector 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%
MGIC Yearly Profit, Operating, Gross MarginsMGIC Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30

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5

2. MGIC Health Analysis

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.
  • The number of shares outstanding for MGIC has been increased compared to 5 years ago.
  • The debt/assets ratio for MGIC has been reduced compared to a year ago.
MGIC Yearly Shares OutstandingMGIC Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 10M 20M 30M 40M
MGIC Yearly Total Debt VS Total AssetsMGIC Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 100M 200M 300M 400M 500M

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 68.12% 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 43.12% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.23
Debt/FCF 1.92
Altman-Z N/A
ROIC/WACC1.55
WACC8.83%
MGIC Yearly LT Debt VS Equity VS FCFMGIC Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 50M 100M 150M 200M 250M

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.
  • 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 (1.61) which is in line with its industry peers.
Industry RankSector Rank
Current Ratio 1.61
Quick Ratio 1.61
MGIC Yearly Current Assets VS Current LiabilitesMGIC Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 50M 100M 150M 200M 250M

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5

3. MGIC Growth Analysis

3.1 Past

  • MGIC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.38%.
  • Measured over the past years, MGIC shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.14% on average per year.
  • Looking at the last year, MGIC shows a small growth in Revenue. The Revenue has grown by 3.35% 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)6.38%
EPS 3Y0%
EPS 5Y10.14%
EPS Q2Q%8.7%
Revenue 1Y (TTM)3.35%
Revenue growth 3Y4.81%
Revenue growth 5Y11.18%
Sales Q2Q%13.07%

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.
  • Based on estimates for the next years, MGIC will show a small growth in Revenue. The Revenue will grow by 7.56% on average per year.
EPS Next Y11.77%
EPS Next 2Y10.63%
EPS Next 3Y10.1%
EPS Next 5YN/A
Revenue Next Year11.76%
Revenue Next 2Y8.96%
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.
  • The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
MGIC Yearly Revenue VS EstimatesMGIC Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 200M 400M 600M
MGIC Yearly EPS VS EstimatesMGIC Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 0.2 0.4 0.6 0.8 1

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5

4. MGIC Valuation Analysis

4.1 Price/Earnings Ratio

  • A Price/Earnings ratio of 17.38 indicates a rather expensive valuation of MGIC.
  • Based on the Price/Earnings ratio, MGIC is valued a bit cheaper than 77.54% of the companies in the same industry.
  • Compared to an average S&P500 Price/Earnings ratio of 27.47, MGIC is valued a bit cheaper.
  • The Price/Forward Earnings ratio is 15.11, which indicates a correct valuation of MGIC.
  • Based on the Price/Forward Earnings ratio, MGIC is valued a bit cheaper than 76.81% of the companies in the same industry.
  • The average S&P500 Price/Forward Earnings ratio is at 22.62. MGIC is valued slightly cheaper when compared to this.
Industry RankSector Rank
PE 17.38
Fwd PE 15.11
MGIC Price Earnings VS Forward Price EarningsMGIC Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

  • MGIC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. MGIC is cheaper than 87.32% of the companies in the same industry.
  • Compared to the rest of the industry, the Price/Free Cash Flow ratio of MGIC indicates a somewhat cheap valuation: MGIC is cheaper than 79.35% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 16.7
EV/EBITDA 11.06
MGIC Per share dataMGIC EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 2 4 6 8 10

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)1.48
PEG (5Y)1.71
EPS Next 2Y10.63%
EPS Next 3Y10.1%

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3

5. MGIC Dividend Analysis

5.1 Amount

  • MGIC has a Yearly Dividend Yield of 1.74%.
  • In the last 3 months the price of MGIC has falen by -24.70%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
  • Compared to an average industry Dividend Yield of 0.64, MGIC pays a better dividend. On top of this MGIC pays more dividend than 94.20% of the companies listed in the same industry.
  • MGIC's Dividend Yield is comparable with the S&P500 average which is at 1.81.
Industry RankSector Rank
Dividend Yield 1.74%

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
MGIC Yearly Dividends per shareMGIC Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.2 0.4 0.6 0.8

5.3 Sustainability

  • MGIC pays out 97.86% of its income as dividend. This is not a sustainable payout ratio.
DP97.86%
EPS Next 2Y10.63%
EPS Next 3Y10.1%
MGIC Yearly Income VS Free CF VS DividendMGIC Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 20M 40M 60M
MGIC Dividend Payout.MGIC Dividend Payout, showing the Payout Ratio.MGIC Dividend Payout.PayoutRetained Earnings

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MGIC Fundamentals: All Metrics, Ratios and Statistics

MAGIC SOFTWARE ENTERPRISES

NASDAQ:MGIC (2/23/2026, 8:00:01 PM)

After market: 17.38 0 (0%)

17.38

-2.02 (-10.41%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)11-18
Earnings (Next)03-18
Inst Owners20.69%
Inst Owner Change-0.01%
Ins Owners0.39%
Ins Owner ChangeN/A
Market Cap853.36M
Revenue(TTM)553.00M
Net Income(TTM)38.83M
Analysts80
Price Target18.36 (5.64%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 1.74%
Yearly Dividend0.2
Dividend Growth(5Y)-7.77%
DP97.86%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
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)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.9%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.02%
Valuation
Industry RankSector Rank
PE 17.38
Fwd PE 15.11
P/S 1.46
P/FCF 16.7
P/OCF 15.52
P/B 3.06
P/tB 16.1
EV/EBITDA 11.06
EPS(TTM)1
EY5.75%
EPS(NY)1.15
Fwd EY6.62%
FCF(TTM)1.04
FCFY5.99%
OCF(TTM)1.12
OCFY6.45%
SpS11.91
BVpS5.68
TBVpS1.08
PEG (NY)1.48
PEG (5Y)1.71
Graham Number11.3071 (-34.94%)
Profitability
Industry RankSector 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 RankSector 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
WACC8.83%
ROIC/WACC1.55
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)6.38%
EPS 3Y0%
EPS 5Y10.14%
EPS Q2Q%8.7%
EPS Next Y11.77%
EPS Next 2Y10.63%
EPS Next 3Y10.1%
EPS Next 5YN/A
Revenue 1Y (TTM)3.35%
Revenue growth 3Y4.81%
Revenue growth 5Y11.18%
Sales Q2Q%13.07%
Revenue Next Year11.76%
Revenue Next 2Y8.96%
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 Fundamental Analysis FAQ

Can you provide the ChartMill fundamental rating for MAGIC SOFTWARE ENTERPRISES?

ChartMill assigns a fundamental rating of 5 / 10 to MGIC.


Can you provide the valuation status for MAGIC SOFTWARE ENTERPRISES?

ChartMill assigns a valuation rating of 5 / 10 to MAGIC SOFTWARE ENTERPRISES (MGIC). This can be considered as Fairly Valued.


How profitable is MAGIC SOFTWARE ENTERPRISES (MGIC) stock?

MAGIC SOFTWARE ENTERPRISES (MGIC) has a profitability rating of 7 / 10.


What is the valuation of MAGIC SOFTWARE ENTERPRISES based on its PE and PB ratios?

The Price/Earnings (PE) ratio for MAGIC SOFTWARE ENTERPRISES (MGIC) is 17.38 and the Price/Book (PB) ratio is 3.06.


What is the expected EPS growth for MAGIC SOFTWARE ENTERPRISES (MGIC) stock?

The Earnings per Share (EPS) of MAGIC SOFTWARE ENTERPRISES (MGIC) is expected to grow by 11.77% in the next year.