Barclays analysts see 41% upside in the share price of Magic Software Enterprises Ltd. (Nasdaq: MGIC; TASE: MGIC) after the Israeli company reported strong fourth quarter 2015 results.
Despite negative impact from foreign currency exchange rates, Magic reported record fourth quarter revenue of $47.9 million up 13% from $42.5 million in the corresponding quarter of 2014. However, non-GAAP net profit of $5.6 million ($0.13 per share) was down from $5.7 million ($0.13 per share) in the corresponding quarter.
Full year Revenue for 2015 was a record $176.0 million, up 7% from $164.3 million in 2014. Non-GAAP net profit in 2015 was $21.7 million $0.49 per share) up 6% from $20.5 million ($0.47 per share) in 2014.
Barclays said, "MGIC delivered a strong set of results and guidance, above both ours and the Reuters consensus estimates. We see 41% upside potential to our $8 PT. This is based on SOTP; the 3% 2016E dividend yield suggests downside protection."
Magic CEO Guy Bernstein said, "I’m very pleased to report our sixth consecutive year of record-breaking revenues and operating results. We achieved these excellent results despite the significant impact of the erosion of foreign currency exchange rates on our top and bottom line. We were able to exceed our guidance thanks to the strength of our portfolio and our global customer base.”
Magic sees revenue between $191 million and $195 million in 2016, on a constant currency basis.
The company's share price rose 75 to $6.09 on Nasdaq yesterday, giving a market cap of $269.5 million.
Published by Globes [online], Israel business news - www.globes-online.com - on February 18, 2016
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