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

  • 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.
  • 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

  • Looking at the Return On Assets, with a value of 7.16%, MGIC is in the better half of the industry, outperforming 78.62% of the companies in the same industry.
  • MGIC's Return On Equity of 13.92% is fine compared to the rest of the industry. MGIC outperforms 79.35% of its industry peers.
  • Looking at the Return On Invested Capital, with a value of 13.66%, MGIC belongs to the top of the industry, outperforming 90.22% of the companies in the same industry.
  • MGIC had an Average Return On Invested Capital over the past 3 years of 13.11%. This is above the industry average of 10.89%.
  • 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

  • Looking at the Profit Margin, with a value of 6.64%, MGIC is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
  • MGIC's Profit Margin has been stable in the last couple of years.
  • Looking at the Operating Margin, with a value of 10.94%, MGIC is in the better half of 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.
  • MGIC's Gross Margin of 28.38% is on the low side compared to the rest of the industry. MGIC is outperformed by 80.07% of its industry peers.
  • 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

  • MGIC has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is 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.
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

  • 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 68.12% 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 43.12% of its industry peers.
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

  • A Current Ratio of 1.61 indicates that MGIC should not have too much problems paying its short term obligations.
  • MGIC has a Current ratio of 1.61. This is comparable to the rest of the industry: MGIC outperforms 48.91% 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 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%.
  • The Earnings Per Share has been growing by 10.14% on average over the past years. This is quite good.
  • MGIC shows a small growth in Revenue. In the last year, the Revenue has grown by 3.35%.
  • 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)6.38%
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.
  • MGIC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.56% yearly.
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

  • 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.
  • 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.
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

  • The Price/Earnings ratio is 17.38, which indicates a rather expensive current valuation of MGIC.
  • 77.54% 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 25.70, 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 the industry average as 76.81% of the companies are valued more expensively.
  • The average S&P500 Price/Forward Earnings ratio is at 23.84. 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 40

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.
  • 79.35% of the companies in the same industry are more expensive than MGIC, based on the Price/Free Cash Flow ratio.
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

  • 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)1.48
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%. Purely for dividend investing, there may be better candidates out there.
  • The stock price of MGIC dropped by -24.70% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
  • MGIC's Dividend Yield is rather good when compared to the industry average which is at 0.57. MGIC pays more dividend than 94.20% of the companies in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.82, MGIC has a dividend comparable with the average S&P500 company.
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-2.89%
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 %0.25%
Short Ratio1.69
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 Number11.31
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.


What is the profitability of MGIC stock?

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


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.


Is the dividend of MAGIC SOFTWARE ENTERPRISES sustainable?

The dividend rating of MAGIC SOFTWARE ENTERPRISES (MGIC) is 3 / 10 and the dividend payout ratio is 97.86%.