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Formula Systems (1985) Ltd. (FORTY) vs Penguin Solutions, Inc. (PENG)

Formula Systems (1985) Ltd. and Penguin Solutions, Inc. are both Information Technology Services companies. Penguin Solutions, Inc. is the larger, with a market value of $3.1B against $1.9B — 1.7× the size. Formula Systems (1985) Ltd. trades at the lower P/E: 2.9× against 16.9×. Formula Systems (1985) Ltd. grew revenue faster over the last twelve months: 41.0% against 26.5%. Formula Systems (1985) Ltd. has the higher net margin (21.6% vs 8.73%) and the lower return on invested capital (12.0% vs 15.2%). Across the 21 metrics below, Formula Systems (1985) Ltd. leads on 14 and Penguin Solutions, Inc. on 7.

Valuation

Metric FORTY PENG Information Technology Services median
P/E 2.89 16.91 18.04
P/S 0.62 1.46 1.18
P/B 1.03 4.70 1.82
Price to free cash flow 2.76 n/m 12.43
EV/EBITDA 5.90 12.20 10.07
EV/Sales 0.50 1.54 1.37
Earnings yield 34.59% 5.91% 3.46%
Free cash flow yield 36.29% (6.48%) 0.77%

Profitability

Metric FORTY PENG Information Technology Services median
Gross margin 19.83% 27.66% 29.81%
Operating margin 8.54% 9.56% 1.81%
Net margin 21.57% 8.73% 0.91%
Free cash flow margin 0.00% (9.44%) 0.00%
Return on equity 0.00% 32.05% 0.00%
Return on assets 18.83% 6.87% 0.00%
Return on invested capital 11.98% 15.24% 0.00%

Growth

Metric FORTY PENG Information Technology Services median
Revenue growth (TTM) 41.04% 26.50% 4.96%
EPS growth (last fiscal year) 654.22% 828.57% 3.57%
Revenue growth, 5-year CAGR 6.32% 10.41% 7.15%
Net income growth, 5-year CAGR 66.94% 47.95% 0.00%

Health

Metric FORTY PENG Information Technology Services median
Debt to equity 0.31 1.47 0.31
Current ratio 1.48 1.88 1.69
Net debt to EBITDA (2.40) 0.65 0.42

Dividend

Metric FORTY PENG Information Technology Services median
Dividend yield 1.80% — 1.80%
Payout ratio 0.05 — 0.30

Size

Metric FORTY PENG Information Technology Services median
Market cap 1.87b 3.13b 1.06b

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