Reviewing Globant (NYSE:GLOB) & Formula Systems (1985) (NASDAQ:FORTY)

Formula Systems (1985) (NASDAQ:FORTY) and Globant (NYSE:GLOB) are both small-cap technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Volatility & Risk

Formula Systems (1985) has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500. Comparatively, Globant has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Institutional and Insider Ownership

34.8% of Formula Systems (1985) shares are owned by institutional investors. Comparatively, 91.6% of Globant shares are owned by institutional investors. 23.3% of Formula Systems (1985) shares are owned by insiders. Comparatively, 2.7% of Globant shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Formula Systems (1985) and Globant’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Formula Systems (1985)	21.57%	4.38%	2.13%
Globant	4.63%	9.28%	6.18%

Valuation & Earnings

This table compares Formula Systems (1985) and Globant”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Formula Systems (1985)	$2.93 billion	0.67	$606.48 million	$39.83	3.21
Globant	$2.45 billion	0.77	$102.92 million	$2.55	16.99

Formula Systems (1985) has higher revenue and earnings than Globant. Formula Systems (1985) is trading at a lower price-to-earnings ratio than Globant, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Formula Systems (1985) and Globant, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Formula Systems (1985)	0	1	0	0	2.00
Globant	2	11	5	0	2.17

Globant has a consensus target price of $45.75, suggesting a potential upside of 5.57%. Given Globant’s stronger consensus rating and higher probable upside, analysts clearly believe Globant is more favorable than Formula Systems (1985).

Summary

Globant beats Formula Systems (1985) on 8 of the 14 factors compared between the two stocks.

About Formula Systems (1985)

Formula Systems (1985) Ltd., through its subsidiaries, provides proprietary and non-proprietary software solutions, IT professional services, software product marketing and support, computer infrastructure and integration solutions, and learning and integration worldwide. The company offers computer and telecommunication infrastructure solutions; and sells and markets computers and peripheral equipment, and cloud based solutions and services relating to databases and big data. It also provides customer relations management, computer systems management infrastructures, web world content management, database and data warehouse mining, application integration, database and systems, data management, and software development tools; and application and professional training courses, and advanced professional studies. In addition, the company offers property and casualty insurance platforms, such as Sapiens, Sapiens CoreSuite, Sapiens IDITSuite, and IDIT Go; life, pension, and annuities platforms, including Sapiens, Sapiens CoreSuite, Sapiens UnderwritingPro, Sapiens ApplicationPro, Sapiens IllustrationPro, and Sapiens ConsolidationMaster; Sapiens Cloud-based DigitalSuite; data and analytics platform; and reinsurance software solutions comprising Sapiens ReinsuranceMaster, Sapiens ReinsurancePro, and Sapiens Reinsurance GO. Further, it provides Sapiens workers' compensation solutions; Sapiens medical professional liability solutions; financial and compliance solutions, such as Sapiens FinancialPro, Sapiens Financial GO, Sapiens StatementPro, Sapiens CheckPro, and Sapiens Reporting Tools; Sapiens Decision; and technology-based solutions. Additionally, it offers application development and business process integration platforms; vertical software solutions; strategic consulting and outsourcing services; and professional services in various areas, as well as develops on-premise payroll software. The company was incorporated in 1985 and is headquartered in Or Yehuda, Israel.

About Globant

Globant S.A., together with its subsidiaries, provides technology services worldwide. It provides digital solutions comprising blockchain, cloud technologies, cybersecurity, data and artificial intelligence, digital experience and performance, code, Internet of Things, metaverse, and engineering and testing; and enterprise technology solutions and services, such as Agile organization, Cultural Hacking, process optimization services, as well as AWS, Google Cloud, Microsoft, Oracle, SalesForce, SAP, and ServiceNow technology solutions. Further, the company provides e-commerce, conversational interfaces, design, digital marketing, and digital product delivery services. Additionally, it operates Augoor, an AI-powered platform; MagnifAI, an AI-powered solution for software quality assurance; StarMeUp, a science-based AI platform; WaaSabi, a finance platform; Walmeric, a lead-to-revenue management platform; GeneXus, a suit of AI development tools; Navigate for process optimization powerhouse; BeHealthy, a white-label platform; and FluentLab, an AI conversational and engagement solution. The company offers its services to various industries, including media and entertainment, professional services, technology and telecommunications, travel and hospitality, banks, financial services and insurance, consumer, retail and manufacturing, health care, and others. The company was formerly known as IT Outsourcing S.L. and changed its name to Globant S.A. in December 2012. Globant S.A. was founded in 2003 and is based in Luxembourg, Luxembourg.