Formula Systems (1985) Ltd. (FORTY) vs Innodata Inc (INOD)

Formula Systems (1985) Ltd. and Innodata Inc are both Information Technology Services companies. Innodata Inc is the larger, with a market value of $2.0B against $1.8B — 1.1× the size. Formula Systems (1985) Ltd. trades at the lower P/E: 2.7× against 36.9×. Formula Systems (1985) Ltd. grew revenue faster over the last twelve months: 41.0% against 39.0%. Formula Systems (1985) Ltd. has the higher net margin (21.6% vs 14.7%) and the higher return on invested capital (12.0% vs 0.00%). Across the 22 metrics below, Formula Systems (1985) Ltd. leads on 14 and Innodata Inc on 8.

Valuation

Metric FORTY INOD Information Technology Services median
P/E 2.72 36.94 16.42
P/S 0.59 5.57 1.06
P/B 0.97 11.08 1.57
Price to free cash flow 2.59 9.62 11.62
EV/EBITDA 5.46 25.07 9.74
EV/Sales 0.47 5.03 1.23
Earnings yield 36.78% 2.71% 4.25%
Free cash flow yield 38.58% 10.40% 4.50%

Profitability

Metric FORTY INOD Information Technology Services median
Gross margin 19.83% 42.71% 29.97%
Operating margin 8.54% 17.48% 3.30%
Net margin 21.57% 14.66% 2.09%
Free cash flow margin 0.00% 57.97% 1.51%
Return on equity 0.00% 37.75% 3.67%
Return on assets 18.83% 19.00% 0.47%
Return on invested capital 11.98% 0.00% 0.57%

Growth

Metric FORTY INOD Information Technology Services median
Revenue growth (TTM) 41.04% 39.02% 7.12%
EPS growth (last fiscal year) 654.22% 3.37% 1.38%
Revenue growth, 5-year CAGR 6.32% 34.00% 7.86%
Net income growth, 5-year CAGR 66.94% 120.53% 0.00%

Health

Metric FORTY INOD Information Technology Services median
Debt to equity 0.31 0.49 0.45
Current ratio 1.48 1.73 1.66
Net debt to EBITDA (2.40) (1.56) 0.45

Dividend

Metric FORTY INOD Information Technology Services median
Dividend yield 0.46% — 1.97%
Payout ratio 0.01 — 0.30

Size

Metric FORTY INOD Information Technology Services median
Market cap 1.75b 1.95b 1.11b

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