FORTY

Rating neutralAI Memo

Formula (1985)

As of 2026-07-26/Confidence medium/Horizon 6‑12m

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Data freshness

AI Memo

As of 2026-07-26 • Model: RankAlpha Sentiment Codex

Decision Panel

Action, confidence, horizon, and decision blockers at a glance.

Action

neutral

Confidence

medium

Horizon

6‑12m

Key catalyst

Matrix–Magic integration and end-market demand • 2026-10-17

Expected move: +2%

Biggest risk

Headline earnings benefited from the TSG capital gain, while Sapiens has exited the consolidated portfolio. The remaining thesis therefore relies on integration, acquisition and portfolio execution; no analyst revisions or target changes are available.

Invalidation

Break below $100 or thesis failure.

What would change my mind?

Record Q1 revenue and earnings, improved Matrix margins after the Magic merger, and continued demand in AI, cloud, cybersecurity and defense support a cautiously constructive operating case [#IR-2026-05-28].

Research note

Recommendation

neutral

Confidence

medium

As of

2026-07-26

Base target

$116

p=50%

Bull target

$128

p=25%

Bear target

$100

p=25%

Key bullets

Fast scan of bull, bear, and watch items

BullKey bullets

Q1 earnings quality requires validation
Portfolio execution after Sapiens divestiture
Record Q1 revenue and earnings, improved Matrix margins after the Magic merger, and continued demand in AI, cloud, cybersecurity and defense support a cautiously constructive operating case [#IR-2026-05-28].

BearKey bullets

Company forward-looking statements identify macroeconomic, integration, technology, sales-cycle, cybersecurity, geopolitical and Israel-related risks [#IR-2026-05-28].
Matrix–Magic integration and the broader portfolio require continued execution after major structural changes.
No current analyst targets, estimate revisions, options data, insider data or social coverage are available.

WatchKey bullets

Matrix–Magic integration and end-market demand

Summary

High-level snapshot

Recommendation

neutral

Model confidence

medium

Timeframe

6‑12m

Asset

Equity

Trigger

Base case: $116 (p=50%)

Bull/Bear spread: +12% / -12%

Vs latest close: Bull +12% · Base +2% · Bear -12%

Scenario probabilities

Bull Target: $128 (p=25%)Base Target: $116 (p=50%)Bear Target: $100 (p=25%)

Commentary

The company’s investor-relations financial-reports page was successfully fetched and lists First Quarter Results 2026. The primary Q1 release showed strong reported growth, but the evidence base remains thin for a higher-conviction thesis. The anchor price was $114 on 2026-07-24. Recent secondary context described weak 2026 price momentum, while analyst reaction, target revisions and consensus surprise data are unavailable; missing reaction is not treated as positive evidence. This remains a cautious monitoring view.

As of 2026-07-26 • Updated bi-weekly / post-earningsSource: Internal modelMethodology

Analyst Summary

Thesis highlights from the latest analysis

Bull Case

Bear Case

Drivers

Scannable catalysts and supporting factors

Q1 earnings quality requires validation
Portfolio execution after Sapiens divestiture

Scenarios

Bull Target (Scenario probability)

$128 / p=25% prob

Base Target (Scenario probability)

$116 / p=50% prob

Bear Target (Scenario probability)

$100 / p=25% prob

Price $114 as of 2026-07-24

Nearest Scenario: Base (∆ 2%)

Targets vs latest close: Bull +12% · Base +2% · Bear -12%

Sentiment & Exposure

News Sentiment (30d)

0.00

Social Sentiment (7d)

0.00

Events

Other notable items detected

EVENT2026-10-17
Matrix–Magic integration and end-market demand
Matrix reported a 9.5% operating margin versus 8.8% a year earlier, with demand across IT services, cybersecurity, cloud, data, AI infrastructure and defense-related activities. Execution after the merger is the clearest forward operating catalyst [#IR-2026-05-28].
Prob 60.00% • Move 7.00% • Priced-in 45.00%

Short-term Catalysts

Next few weeks

Q1 earnings quality requires validation
2026-10-17
Q1 revenue rose 19.2% year over year to $738.3 million and continuing-operations net income attributable to shareholders rose 60.5% excluding a $16.8 million TSG-related capital gain. The next report must show that recurring operating performance is sustaining the headline growth [#IR-2026-05-28].
Prob 70% • Move -5% • Priced-in 65%

Long-term Catalysts

Months to a year

Portfolio execution after Sapiens divestiture
2027-03-31
The longer-term thesis depends on Matrix, Michpal, TSG and other holdings converting portfolio changes, acquisitions and capital allocation into durable profitable growth. Formula reported approximately $1.18 billion of cash and deposits at March 31, 2026, but forward visibility remains limited [#IR-2026-05-28].
Prob 45% • Move 10% • Priced-in 35%

Risks

Company forward-looking statements identify macroeconomic, integration, technology, sales-cycle, cybersecurity, geopolitical and Israel-related risks [#IR-2026-05-28].
Matrix–Magic integration and the broader portfolio require continued execution after major structural changes.
No current analyst targets, estimate revisions, options data, insider data or social coverage are available.
Reported operating income included a $16.8 million TSG-related capital gain, making recurring earnings quality important.
The peer set is loose because Formula is a diversified holding company rather than a pure-play software issuer.

Peers

Symbol	Summary
ALKT	Same-sector market-cap proxy, but not a direct operating comparable because Formula is a diversified IT holding company.
APPN	Enterprise-software valuation reference with different business mix and growth drivers; useful only as a loose multiple proxy.
FIVN	Software-sector sentiment and valuation proxy, not a close comparable to Formula's multi-holding structure.

Sources

Internal and external references used in this analysis

Model source: RankAlpha Sentiment Codex
Analysis date: 2026-07-26

AI Stock Memo: FORTY - Formula (1985) - RankAlpha