(MGIC) Magic Software Enterprises - Ratings and Ratios

Magic Software Enterprises Ltd. (NASDAQ:MGIC) is a global provider of proprietary software solutions, specializing in application development, business process integration, and IT outsourcing services. Headquartered in Or Yehuda, Israel, the company has been operational since 1983, initially as Mashov Software Export (1983) Ltd., before rebranding in 1991. Its offerings span a wide range of industries, delivering tailored software applications and integration solutions to streamline business operations.

The company operates through two primary segments: Software Services and IT Professional Services. The Software Services segment focuses on developing and marketing application platforms, business integration solutions, and software applications. Key products include Magic xpa, a rapid application development platform; Magic xpi, an integration platform for connecting disparate systems; and Magic SmartUX, which enables cross-platform mobile app development. Additionally, the company offers vertical software solutions such as Clicks for healthcare providers, Leap for business support systems, and Hermes Cargo for air cargo management.

The IT Professional Services segment provides end-to-end IT solutions, including infrastructure design, application development, and technology implementation. The company also offers software maintenance, support, and consulting services to ensure clients maximize the value of their investments. Its customer base spans multiple industries, including healthcare, manufacturing, and telecommunications.

From a financial perspective, Magic Software Enterprises Ltd. has a market capitalization of $629.07 million, with a price-to-earnings (P/E) ratio of 18.24 and a forward P/E of 23.92. The companys price-to-book (P/B) ratio stands at 2.34, indicating a premium valuation relative to its book value. The trailing 12-month price-to-sales (P/S) ratio is 1.17, while the return on equity (RoE) is 12.43%, reflecting moderate profitability.

Technically, the stock has shown recent trading activity with an average 20-day volume of 38,595 shares. The last closing price was $12.25, with key moving averages at SMA 20: $12.85, SMA 50: $12.44, and SMA 200: $11.19. The Average True Range (ATR) of 0.33 suggests moderate price volatility over the past year.

Over the next three months, MGIC is expected to experience sideways trading with potential upside, driven by its stable financials and growing demand for integration solutions. The stock may face resistance near the SMA 50 level of $12.44, with support likely at the SMA 200 level of $11.19. The ATR of 0.33 suggests that price movements will remain contained, with minimal breakout potential in the near term.

The companys forward P/E of 23.92 indicates investor confidence in future earnings growth, which could drive the stock higher if earnings reports align with expectations. The P/S ratio of 1.17 suggests the market is pricing in moderate revenue growth, supported by its diverse product portfolio and recurring revenue streams from maintenance and support services. With an RoE of 12.43%, the company is generating solid returns for shareholders, which could attract further investment.