Formula Systems (1985)FRA:FSY -1.12%68 Gross Margin % is 19.78% as of Mar. 2026, which is 12% below its 10-year median of 22.51. GuruFocus rates FRA:FSY with a GF Score™ of 68/100 and a GF Value™ of €100.75 (Modestly Undervalued). The stock has 4 warning signs investors should review. Among 2,683 Software companies, Formula Systems (1985) ranks worse than 78.05% on this metric.
FRA:FSY's Gross Margin % is ranked worse than 78.05% of 2683
companies
in the Software industry
Industry Median: 40.45
vs FRA:FSY: 21.04
Formula Systems (1985) had a gross margin of 19.78% for the quarter that ended in Mar. 2026 => No sustainable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Formula Systems (1985) was -4.10% per year.
Formula Systems (1985) (FRA:FSY) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Formula Systems (1985) had a gross margin of 19.78% for the quarter that ended in Mar. 2026 => No sustainable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Formula Systems (1985) Gross Margin % Related Terms
Formula Systems (1985) Gross Margin % Historical Data
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The historical data trend for Formula Systems (1985)'s Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
FRA:FSY vs IBM, ACN, FISV: Gross Margin % Comparison
For the Information Technology Services subindustry, Formula Systems (1985)'s Gross Margin %, along with its competitors' market caps and Gross Margin % 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.
Formula Systems (1985) Gross Margin % vs Software Industry
For the Software industry and Technology sector, Formula Systems (1985)'s Gross Margin % distribution charts can be found below:
* The bar in red indicates where Formula Systems (1985)'s Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Formula Systems (1985) (FRA:FSY) has a Gross Margin % of 19.78% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Formula Systems (1985) and its competitors. This is 12% below median its historical median of 22.51. Over the past decade, Formula Systems (1985)'s Gross Margin % has ranged from 19.76 to 24.20. According to the industry distribution chart, Formula Systems (1985) ranks #2094 out of 2683 companies in the Software industry, placing it in the top 78%.
Is Formula Systems (1985)'s Gross Margin % too high?
Formula Systems (1985)'s current Gross Margin % of 19.78% is 12% below median its 10-year median of 22.51. Over the past 10 years, this metric has ranged from a low of 19.76 to a high of 24.20. The Software industry median Gross Margin % is 40.45. Formula Systems (1985)'s value of 19.78% is 51.1% below this industry median. Based on the distribution chart, Formula Systems (1985) ranks #2094 out of 2683 companies in the Software industry, which is in the bottom quartile relative to peers. Overall, Formula Systems (1985) has a GF Score™ of 68/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Formula Systems (1985)'s Gross Margin % compare to IBM and ACN?
According to the Software industry distribution chart, Formula Systems (1985) ranks #2094 out of 2683 companies for Gross Margin %. This places Formula Systems (1985) in the lower half of its industry. The industry median Gross Margin % is 40.45. Formula Systems (1985)'s value of 19.78% is 51.1% below this benchmark. Historically, Formula Systems (1985)'s own Gross Margin % has ranged from 19.76 to 24.20 over the past decade. While the company's 10-year median is 22.51 vs. the industry median of 40.45, Formula Systems (1985) has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Software company?
The median Gross Margin % among Software companies is 40.45, based on 2,683 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Formula Systems (1985)'s current Gross Margin % of 19.78% is 51.1% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Formula Systems (1985) and its competitors. For the Software industry, the median Gross Margin % is 40.45 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Formula Systems (1985)'s current Gross Margin % is 19.78%, which is 12% below median its own 10-year median of 22.51. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Formula Systems (1985) stock overvalued right now?
Based on GuruFocus' analysis, Formula Systems (1985) (FRA:FSY) is currently considered Modestly Undervalued. The stock's GF Value™ is €100.75, compared to a current price of €88.00 — trading 12.7% below its estimated fair value. The current Gross Margin % is 19.78%, which is 12% below median its 10-year median of 22.51 and 51.1% below the Software industry median of 40.45. Formula Systems (1985)'s overall GF Score™ is 68/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Formula Systems (1985) (FRA:FSY), the current Gross Margin % is 19.78% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Formula Systems (1985) (FRA:FSY) Overvalued in 2026?
Based on GuruFocus' analysis, Formula Systems (1985) stock appears to be undervalued.
The current stock price of €88.00 is trading 12.7% below its estimated GF Value™ of €100.75.
GuruFocus considers Formula Systems (1985) to be Modestly Undervalued.
Key valuation signals for FRA:FSY:
Gross Margin %: 19.78% (12% below median its 10-year median of 22.51)
GF Value™: €100.75 vs. price of €88.00 (12.7% below fair value)
Industry Position: 51.1% below the Software median (#2094 of 2683)
No single metric tells the full story. See the FRA:FSY stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Formula Systems (1985) Ltd is an information technology company that is principally engaged through its directly and indirectly held investees in providing software consulting services, selling and marketing computer-based business solutions and hardware products from a wide range of domestic and international manufacturers, as well as developing proprietary software solutions. It delivers solutions in Israel and in numerous countries to customers with complex IT services needs. It designs and implements IT solutions and software systems that improve the productivity of customers' existing IT assets, enable them to effectively manage their operations and reduce their business risks in the face of changing business environments.
68GF Score
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