26.25 USD
-0.75 (-2.78%)
26.25 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to MGIC. MGIC was compared to 276 industry peers in the Software industry. MGIC scores excellent on profitability, 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
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.
1.2 Ratios
MGIC has a better Return On Assets (7.16%) than 76.98% of its industry peers.
With an excellent Return On Equity value of 13.92%, MGIC belongs to the best of the industry, outperforming 80.58% of the companies in the same industry.
MGIC has a Return On Invested Capital of 13.66%. This is amongst the best in the industry. MGIC outperforms 91.01% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MGIC is above the industry average of 10.78%.
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
MGIC has a Profit Margin of 6.64%. This is in the better half of the industry: MGIC outperforms 66.55% of its industry peers.
In the last couple of years the Profit Margin of MGIC has remained more or less at the same level.
MGIC has a better Operating Margin (10.94%) than 76.26% 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 79.50% of its industry peers.
MGIC's Gross Margin has declined in the last couple of years.
| 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.
MGIC has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for MGIC has been increased compared to 5 years ago.
MGIC has a better debt/assets ratio than last year.
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 has a Debt to FCF ratio of 1.92. This is in the better half of the industry: MGIC outperforms 68.70% 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 43.53% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.23 | ||
| Debt/FCF | 1.92 | ||
| Altman-Z | N/A |
ROIC/WACC1.52
WACC8.99%
2.3 Liquidity
A Current Ratio of 1.61 indicates that MGIC should not have too much problems paying its short term obligations.
MGIC's Current ratio of 1.61 is in line compared to the rest of the industry. MGIC outperforms 49.28% of its industry peers.
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's Quick ratio of 1.61 is in line compared to the rest of the industry. MGIC outperforms 50.72% of its industry peers.
| 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 6.38%.
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.
MGIC shows a small growth in Revenue. In the last year, the Revenue has grown by 3.35%.
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)6.38%
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
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 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.
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 26.25 indicates a quite 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 67.63% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of MGIC to the average of the S&P500 Index (26.92), we can say MGIC is valued inline with the index average.
With a Price/Forward Earnings ratio of 22.81, MGIC is valued on the expensive side.
MGIC's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. MGIC is cheaper than 69.42% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.46, MGIC is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.25 | ||
| Fwd PE | 22.81 |
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 82.73% of the companies listed in the same industry.
75.18% of the companies in the same industry are more expensive than MGIC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.22 | ||
| EV/EBITDA | 16.13 |
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)2.23
PEG (5Y)2.59
EPS Next 2Y10.63%
EPS Next 3Y10.1%
5. Dividend
5.1 Amount
MGIC has a Yearly Dividend Yield of 1.12%.
Compared to an average industry Dividend Yield of 0.51, MGIC pays a better dividend. On top of this MGIC pays more dividend than 92.45% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.00, MGIC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.12% |
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 2Y10.63%
EPS Next 3Y10.1%
26.25
-0.75 (-2.78%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners20.61%
Inst Owner Change-1%
Ins Owners0.39%
Ins Owner ChangeN/A
Market Cap1.29B
Revenue(TTM)553.00M
Net Income(TTM)38.83M
Analysts80
Price Target18.36 (-30.06%)
Short Float %0.46%
Short Ratio3.41
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.12% |
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)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)-1.9%
EPS NY rev (3m)-1.9%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)1.02%
Revenue NY rev (3m)1.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.25 | ||
| Fwd PE | 22.81 | ||
| P/S | 2.2 | ||
| P/FCF | 25.22 | ||
| P/OCF | 23.43 | ||
| P/B | 4.62 | ||
| P/tB | 24.32 | ||
| EV/EBITDA | 16.13 |
EPS(TTM)1
EY3.81%
EPS(NY)1.15
Fwd EY4.38%
FCF(TTM)1.04
FCFY3.96%
OCF(TTM)1.12
OCFY4.27%
SpS11.91
BVpS5.68
TBVpS1.08
PEG (NY)2.23
PEG (5Y)2.59
Graham Number11.31
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
WACC8.99%
ROIC/WACC1.52
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 FAQ
Can you provide the ChartMill fundamental rating for MAGIC SOFTWARE ENTERPRISES?
ChartMill assigns a fundamental rating of 5 / 10 to MGIC.
What is the valuation status for MGIC stock?
ChartMill assigns a valuation rating of 4 / 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 26.25 and the Price/Book (PB) ratio is 4.62.
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 11.77% in the next year.