Formula Systems (1985) stock: fair value
FORTYThe fair value of Formula Systems (1985) under our model is $236.16, the price is 49% below.
The fair value is an estimate from our model, not a price target.
Daily figure as of 13 Nov 2026
Valuation signal
Significantly undervaluedIn our model the price counts as cheap below $168.69 and expensive above $393.60 (uncertainty high, based on the price swings of the past year).
The two parts of the fair value come to $392.80 (cash-flow model) and $79.52 (industry comparison), and the gap between them shows how uncertain the estimate is.
Calculated with a cost of equity of 11.7%. At 12.7% the fair value would be $213.45, at 10.7% it would be $265.48.
Where the number comes from
Half from the cash-flow model, half from earnings times the industry P/E (18.8).
Ten-year cash-flow model from smoothed free cash flow and its past growth until it reaches 3.8%. Discounted at 11.7% (government bond yield 3.8% plus beta 1.26 times a risk premium of 6.3%); no analyst estimates were available.
Calculate with your own assumptionsThe calculation step by step
With these figures the cash flow model arrives at $392.80 per share: free cash flow for the next ten years, each year discounted to today at 11.7%, plus the terminal value for the years after. The table explains the calculation; it is not a recommendation.
Calculation as a table
| Year | Free cash flow | Source | Discount factor | Present value (discounted at 11.7%) |
|---|---|---|---|---|
| 2026 | $415.14M | extrapolated at 13.6% | 0.8949 | $371.52M |
| 2027 | $459.48M | extrapolated at 10.7% | 0.8009 | $368.01M |
| 2028 | $499.12M | extrapolated at 8.6% | 0.7168 | $357.76M |
| 2029 | $535M | extrapolated at 7.2% | 0.6415 | $343.18M |
| 2030 | $568.06M | extrapolated at 6.2% | 0.5741 | $326.11M |
| 2031 | $599.16M | extrapolated at 5.5% | 0.5138 | $307.83M |
| 2032 | $629.01M | extrapolated at 5.0% | 0.4598 | $289.21M |
| 2033 | $658.17M | extrapolated at 4.6% | 0.4115 | $270.83M |
| 2034 | $687.1M | extrapolated at 4.4% | 0.3683 | $253.02M |
| 2035 | $716.13M | extrapolated at 4.2% | 0.3296 | $236.01M |
| Step | Value |
|---|---|
| Sum of present values (ten years) | $3.12B |
| Terminal value: cash flow 2035 × (1 + 3.8%) / (11.7% − 3.8%) | $9.4B |
| Present value of terminal value (× 0.3296) | $3.1B |
| Equity value (sum plus present value of terminal value) | $6.22B |
| Shares (diluted) | 15.84M |
| Value per share (equity value divided by shares) | $392.80 |
| Earnings per share, last twelve months | $4.24 |
| × 18.8 (industry P/E) | $79.52 |
| Fair value (average of both parts) | $236.16 |
The model uses free cash flow after interest, which belongs to shareholders, discounted at the cost of equity. Net debt is therefore not deducted again.
Data status and sources
- Score
- Daily value of 13 Nov 2026, recalculated nightly
- Price
- Closing price of 12 Nov 2026
- Latest annual report
- Fiscal year 2025, period end 31 Dec 2025
- Source
- Financial statements, ratios and prices from Financial Modeling Prep (FMP), based on the company's reports. MEQIRI calculates the score and fair value from them.
Mandatory disclosures for this rating
- ; time horizon around 12 months
- Rated Neutral, published since 7 Nov 2026 (in the score history since 5 Sep 2025)
- Valuation signal Undervalued since 7 Nov 2026
- End-of-day prices, metrics cached for up to 24 hours
- Score and fair value are estimates from a disclosed model. They are not facts and not a price target.
- Produced by SSM Ventures UG (haftungsbeschränkt), responsible person Sven Brostmeyer, Managing Director, automatically according to the disclosed model.
- Not investment advice. Losses up to and including a total loss are possible. Personal circumstances are not considered.