MAGIC SOFTWARE ENTERPRISES (MGIC)
IL0010823123 - Common Stock
Taking everything into account, MGIC scores 5 out of 10 in our fundamental rating. MGIC was compared to 277 industry peers in the Software industry. MGIC scores excellent on profitability, but there are some minor concerns on its financial health. MGIC has a bad growth rate and is valued cheaply. Finally MGIC also has an excellent dividend rating.
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.
In the past 5 years MGIC has always been profitable.
Each year in the past 5 years MGIC had a positive operating cash flow.
1.2 Ratios
The Return On Assets of MGIC (7.05%) is better than 85.51% of its industry peers.
With an excellent Return On Equity value of 13.90%, MGIC belongs to the best of the industry, outperforming 86.59% of the companies in the same industry.
MGIC's Return On Invested Capital of 12.05% is amongst the best of the industry. MGIC outperforms 89.86% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MGIC is above the industry average of 10.19%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.05% | ||
| ROE | 13.9% | ||
| ROIC | 12.05% |
ROA(3y)7.06%
ROA(5y)6.37%
ROE(3y)13.52%
ROE(5y)11.69%
ROIC(3y)12.65%
ROIC(5y)10.98%
1.3 Margins
MGIC's Profit Margin of 6.91% is fine compared to the rest of the industry. MGIC outperforms 76.81% of its industry peers.
In the last couple of years the Profit Margin of MGIC has remained more or less at the same level.
The Operating Margin of MGIC (10.65%) is better than 83.70% of its industry peers.
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 (28.59%) is worse than 79.71% of its industry peers.
In the last couple of years the Gross Margin of MGIC has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.65% | ||
| PM (TTM) | 6.91% | ||
| GM | 28.59% |
OM growth 3Y-1.69%
OM growth 5Y-0.86%
PM growth 3Y0.65%
PM growth 5Y-0.22%
GM growth 3Y-1.06%
GM growth 5Y-1.74%
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.
Compared to 1 year ago, MGIC has about the same amount of shares outstanding.
Compared to 5 years ago, MGIC has more shares outstanding
Compared to 1 year ago, MGIC has a worse debt to assets ratio.
2.2 Solvency
The Debt to FCF ratio of MGIC is 1.49, which is an excellent value as it means it would take MGIC, only 1.49 years of fcf income to pay off all of its debts.
MGIC's Debt to FCF ratio of 1.49 is fine compared to the rest of the industry. MGIC outperforms 72.10% of its industry peers.
MGIC has a Debt/Equity ratio of 0.28. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.28, MGIC is in line with its industry, outperforming 42.03% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.28 | ||
| Debt/FCF | 1.49 | ||
| Altman-Z | N/A |
ROIC/WACC1.45
WACC8.32%
2.3 Liquidity
A Current Ratio of 1.81 indicates that MGIC should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.81, MGIC is in line with its industry, outperforming 51.81% of the companies in the same industry.
A Quick Ratio of 1.81 indicates that MGIC should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.81, MGIC perfoms like the industry average, outperforming 52.54% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.81 | ||
| Quick Ratio | 1.81 |
3. Growth
3.1 Past
The earnings per share for MGIC have decreased by -9.43% in the last year.
MGIC shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 12.07% yearly.
Looking at the last year, MGIC shows a decrease in Revenue. The Revenue has decreased by -5.60% in the last year.
The Revenue has been growing by 13.47% on average over the past years. This is quite good.
EPS 1Y (TTM)-9.43%
EPS 3Y9.21%
EPS 5Y12.07%
EPS growth Q2Q-11.54%
Revenue 1Y (TTM)-5.6%
Revenue growth 3Y12.96%
Revenue growth 5Y13.47%
Revenue growth Q2Q-8.23%
3.2 Future
Based on estimates for the next years, MGIC will show a small growth in Earnings Per Share. The EPS will grow by 6.73% on average per year.
MGIC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.09% yearly.
EPS Next Y0.3%
EPS Next 2Y3.02%
EPS Next 3Y6.73%
EPS Next 5YN/A
Revenue Next Year2.94%
Revenue Next 2Y3.03%
Revenue Next 3Y4.09%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 12.38, the valuation of MGIC can be described as correct.
MGIC's Price/Earnings ratio is rather cheap when compared to the industry. MGIC is cheaper than 91.67% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.15, MGIC is valued rather cheaply.
With a Price/Forward Earnings ratio of 11.31, the valuation of MGIC can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MGIC indicates a rather cheap valuation: MGIC is cheaper than 92.03% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of MGIC to the average of the S&P500 Index (20.20), we can say MGIC is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.38 | ||
| Fwd PE | 11.31 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MGIC is valued cheaply inside the industry as 96.38% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, MGIC is valued cheaply inside the industry as 97.10% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.97 | ||
| EV/EBITDA | 7.5 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
MGIC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)41.25
PEG (5Y)1.03
EPS Next 2Y3.02%
EPS Next 3Y6.73%
5. Dividend
5.1 Amount
MGIC has a Yearly Dividend Yield of 5.08%, which is a nice return.
Compared to an average industry Dividend Yield of 12.72, MGIC pays a better dividend. On top of this MGIC pays more dividend than 97.10% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, MGIC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.08% |
5.2 History
The dividend of MGIC is nicely growing with an annual growth rate of 16.69%!
MGIC has been paying a dividend for at least 10 years, so it has a reliable track record.
MGIC has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)16.69%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
83.28% of the earnings are spent on dividend by MGIC. This is not a sustainable payout ratio.
MGIC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP83.28%
EPS Next 2Y3.02%
EPS Next 3Y6.73%
MAGIC SOFTWARE ENTERPRISES
NASDAQ:MGIC (5/17/2024, 7:12:58 PM)
11.88
+0.17 (+1.45%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap583.31M
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.08% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.38 | ||
| Fwd PE | 11.31 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)41.25
PEG (5Y)1.03
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.05% | ||
| ROE | 13.9% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 10.65% | ||
| PM (TTM) | 6.91% | ||
| GM | 28.59% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.02
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.28 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.81 | ||
| Quick Ratio | 1.81 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-9.43%
EPS 3Y9.21%
EPS 5Y
EPS growth Q2Q
EPS Next Y0.3%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-5.6%
Revenue growth 3Y12.96%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y