Deep Value: cash covers about 91% of the stock price

This company holds roughly $1.6B in cash and investments — about 91% of its entire stock-market value, based on its latest quarterly filing. You're paying very little for the actual business. Sometimes that's a genuine bargain or a takeover target, sometimes it's cheap for a reason. Not a buy signal on its own — always ask why it's this cheap.

Formula Systems (1985)

FORTY

Information Technology Services · Technology

Exchange

NASDAQ

Winston Score

Winston is curious

Mixed quality — meaningful strengths and weaknesses.

Data as of Aug 23, 2026 · filings through Mar 31, 2026

How the score breaks down

Quality

Mixed

Growth

Strong

Cash Flow

Weak

Stability

Strong

Valuation

Good

Dividends

Exceptional

Track this stock — start free trial

Winston Score History

The full picture

Formula Systems is an Israeli technology holding company that owns stakes in several software and IT services businesses. Its main subsidiaries include Sapiens International (insurance software), Matrix IT (IT services and staffing in Israel), and Michpal (payroll and HR software). The company essentially acts as a parent that manages a portfolio of tech firms serving industries like insurance, banking, and enterprise businesses.

Formula Systems makes money through its subsidiaries, which earn revenue from software licenses, subscriptions, professional services, and IT staffing contracts. Most of its business is concentrated in Israel, though Sapiens has a meaningful international presence serving insurance companies across Europe and North America. The holding company structure means Formula Systems' performance depends heavily on how well its subsidiaries execute — particularly Sapiens, which is the largest contributor to revenue and profit. The key growth driver is Sapiens' continued expansion into global insurance markets, while the main risk is the company's heavy geographic concentration in Israel and exposure to regional geopolitical instability.

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+19.8% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+84.9% YoY

YoY Growth Rate

Strong earnings growth

Insider Activity

6.4%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

$1.6B cash & investments

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

Formula Systems (1985) is a rare growth stock that's already generating positive cash flow while growing at 20%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Profit per sale

Gross Margin

19.8%

Thin — 19.8% gross margin

Profit after running costs

Operating Margin

11.1%

Modest — 11.1% operating margin

Return on the money invested

ROCE

12.5%

Good — 12.5% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

Full breakdown available with your free trial

See every metric, trend, and what it means for this stock.

Try free

Growth

Sales growth

Sales YoY

+8.8%

Steady sales growth (+8.8% YoY)

Profit growth

EPS YoY

+657.6%

Earnings growing fast (+657.6% YoY)

Earnings growing 25%+ a year. The compounder zone.

How steady the profit is

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

Full breakdown available with your free trial

See every metric, trend, and what it means for this stock.

Try free

Cash Flow

Profit that turns into cash

Cash Conversion

Weak — only 0% of profit becomes cash

Spare cash per sale

FCF Margin

0.0%

Thin free cash flow (0.0%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

Full breakdown available with your free trial

See every metric, trend, and what it means for this stock.

Try free

Stability

What it owes vs what it owns

Debt / Equity

0.38

Conservative — low debt load (0.38)

Covers its interest

Interest Cover

5.06x

Adequate interest coverage (5.1x)

Interest coverage between 3 and 8. Profits cover interest several times over.

Full breakdown available with your free trial

See every metric, trend, and what it means for this stock.

Try free

Valuation

Price vs profit

P/E Ratio (TTM)

2.8x

no trend

Attractive valuation — P/E 2.8

P/E under 10. The price tag is small relative to last year's profit.

Cheaper or dearer next year

P/E vs Forward

N/A

not available

Data not available

Full breakdown available with your free trial

See every metric, trend, and what it means for this stock.

Try free

Dividends

Dividend

Dividend Yield

13.21%

no trend

Healthy income — 13.21% yield

Yield above 6% — often a flag the market is pricing in a cut.

Dividend record

Dividend Growth

+501.2%

no trend

Dividend growing fast (501.2% YoY)

Full breakdown available with your free trial

See every metric, trend, and what it means for this stock.

Try free

🔒 See full fundamentals and if they are improving or declining — click here for your free trial now.

Start free trial