DCF Tool

MGIC

Magic Software Enterprises Ltd. – Software Publishers
Magic Software Enterprises Ltd. is a global provider of powerful and versatile end-to-end, on-premises and cloud-based integration and low-code application development platforms. With over 30 years of experience, 24 regional offices, millions of installations worldwide, and strategic alliances with global IT leaders, Magic enables its customers to seamlessly adopt new technologies and maximize business opportunities. Magic collaborates closely with its customers and thousands of business partners in 50 countries to accelerate their business performance.
Analysis Results
Intrinsic Value $25.59
Latest Price $16.34
Relative Value 36% undervalued
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Cash Flow (Millions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 10.0%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.7%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 10.0%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (million) Present value (million)
2022 57.8 53.6
2023 63.5 54.8
2024 69.8 56.0
2025 76.8 57.1
2026 84.4 58.4
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 1520 million. This corresponds to a present value of 976 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 280 million. Adding in the terminal value gives a total present value of 1260 million.

There are presently 49.1 million outstanding shares, so the intrinsic value per share is 25.59.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 246,779,000
Current Cash 94,818,000
Current Liabilities 108,265,000
Current Debt 17,032,000
Non-Cash Working Capital (NCWC) 60,728,000
Change in NCWC 12,456,000
EBIT 53,742,000
Tax Provision 10,359,000
Depreciation and Amortization 14,852,000
Capital Expenditure -4,632,000
Unlevered Free Cash Flow 64,118,475
Current Assets 211,226,000
Current Cash 89,654,000
Current Liabilities 84,829,000
Current Debt 11,529,000
Non-Cash Working Capital (NCWC) 48,272,000
Change in NCWC -1,463,000
EBIT 41,676,000
Tax Provision 7,286,000
Depreciation and Amortization 13,939,000
Capital Expenditure -6,074,000
Unlevered Free Cash Flow 39,959,631
Current Assets 205,050,000
Current Cash 95,511,000
Current Liabilities 66,883,000
Current Debt 7,079,000
Non-Cash Working Capital (NCWC) 49,735,000
Change in NCWC -3,307,000
EBIT 33,652,000
Tax Provision 6,874,000
Depreciation and Amortization 14,025,000
Capital Expenditure -5,522,000
Unlevered Free Cash Flow 31,724,205
Current Assets 211,223,000
Current Cash 113,920,000
Current Liabilities 52,922,000
Current Debt 8,661,000
Non-Cash Working Capital (NCWC) 53,042,000
Change in NCWC 11,814,000
EBIT 31,698,000
Tax Provision 7,071,000
Depreciation and Amortization 12,564,000
Capital Expenditure -4,529,000
Unlevered Free Cash Flow 44,509,082
Current Assets 181,640,000
Current Cash 90,946,000
Current Liabilities 59,237,000
Current Debt 9,771,000
Non-Cash Working Capital (NCWC) 41,228,000
Change in NCWC 9,737,000
EBIT 25,956,000
Tax Provision 6,331,000
Depreciation and Amortization 13,611,000
Capital Expenditure -5,171,000
Unlevered Free Cash Flow 37,355,213
Current Assets 158,356,000
Current Cash 87,822,000
Current Liabilities 44,688,000
Current Debt 5,645,000
Non-Cash Working Capital (NCWC) 31,491,000
Change in NCWC 1,217,000
EBIT 21,087,000
Tax Provision 3,949,000
Depreciation and Amortization 11,608,000
Capital Expenditure -5,023,000
Unlevered Free Cash Flow 24,857,796
Current Assets 135,302,000
Current Cash 76,684,000
Current Liabilities 28,357,000
Current Debt 13,000
Non-Cash Working Capital (NCWC) 30,274,000
Change in NCWC 9,008,000
EBIT 21,434,000
Tax Provision 3,681,000
Depreciation and Amortization 9,885,000
Capital Expenditure -4,956,000
Unlevered Free Cash Flow 31,569,942
Current Assets 128,761,000
Current Cash 84,430,000
Current Liabilities 25,918,000
Current Debt 2,853,000
Non-Cash Working Capital (NCWC) 21,266,000
Change in NCWC 11,028,000
EBIT 20,726,000
Tax Provision 2,307,000
Depreciation and Amortization 8,660,000
Capital Expenditure -5,260,000
Unlevered Free Cash Flow 32,620,492
Current Assets 73,173,000
Current Cash 35,988,000
Current Liabilities 28,002,000
Current Debt 1,055,000
Non-Cash Working Capital (NCWC) 10,238,000
Change in NCWC 3,949,000
EBIT 19,127,000
Tax Provision 1,575,000
Depreciation and Amortization 8,380,000
Capital Expenditure -497,000
Unlevered Free Cash Flow 29,324,524
Current Assets 73,697,000
Current Cash 38,634,000
Current Liabilities 28,774,000
Current Debt 0
Non-Cash Working Capital (NCWC) 6,289,000
Change in NCWC 605,000
EBIT 16,408,000
Tax Provision 94,000
Depreciation and Amortization 7,444,000
Capital Expenditure -5,479,000
Unlevered Free Cash Flow 18,884,829

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