Magic Software Enterprises (Magic Software Enterprises) GF Value Rank : 10 (As of Apr. 30, 2024)

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What is Magic Software Enterprises GF Value Rank?

Magic Software Enterprises has the GF Value Rank of 10.

The GF Value Rank is determined by the price-to-GF-Value (P/GF Value) ratio, a proprietary metric calculated based on historical multiples along with an adjustment factor based on a company's past returns and growth and future estimates of the business' performance.

GuruFocus found that for valuation, we cannot simply give stocks a better GF Value rank simply because they have a lower P/GF Value ratio. Backtesting shows that over the long term, the two worst-performing groups are the most expensive group (with the highest P/GF Value ratio) and the least expensive group (with the lowest P/GF Value ratio).

We can understand why the most expensive group underperforms. We were initially puzzled by the underperformance of the least expensive group, but we realized there is a reason why some stocks are super cheap. If they look too undervalued, it is often because the businesses behind them are poor quality. The market realized this and gave them low valuations. In a way, the market is efficient.

After multiple backtesting analyses, we granted the stocks in third-cheapest percentile the highest GF Value rank, as they have performed the best over a full market cycle. Stock performance is actually not as sensitive to valuation as it is to growth and profitability. On average, the companies in the 20%-50% valuation groups have similar performances. Therefore, we should avoid the most expensive and the least expensive stocks. We can be more tolerant of valuation.

Please click GF Score to see more details on the GF Score's 5 Key Aspects of Analysis.

Competitive Comparison of Magic Software Enterprises's GF Value Rank

For the Information Technology Services subindustry, Magic Software Enterprises's GF Value Rank, along with its competitors' market caps and GF Value Rank data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Magic Software Enterprises's GF Value Rank Distribution in the Software Industry

For the Software industry and Technology sector, Magic Software Enterprises's GF Value Rank distribution charts can be found below:

* The bar in red indicates where Magic Software Enterprises's GF Value Rank falls into.

Magic Software Enterprises GF Value Rank Related Terms

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Magic Software Enterprises (Magic Software Enterprises) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Magic Software Enterprises Ltd (NAS:MGIC) » Definitions » GF Value Rank

Comparable Companies

Traded in Other Exchanges

MGIC:Israel MGK:Germany MGK:Germany

Address

Yahadut Canada 1 Street, Or Yehuda, Or Yehuda, ISR, 6037501

Website

https://www.magicsoftware.com

Magic Software Enterprises Ltd is a software development company. The company's operating segment includes Software Services and IT Professional Services. It generates maximum revenue from the IT Professional Services segment. IT Professional Services segment offers advanced and flexible IT services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, communications services and solutions, as well as supplemental outsourcing services. Geographically, it derives a majority of revenue from the United States and also has a presence in Israel; Europe; Japan, and Other countries.