OPEN TEXT CORP (OTEX.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:OTEX - CA6837151068 - Common Stock
46.94 CAD
-0.11 (-0.23%)
Taking everything into account, OTEX scores 5 out of 10 in our fundamental rating. OTEX was compared to 63 industry peers in the Software industry. While OTEX belongs to the best of the industry regarding profitability, there are concerns on its financial health. OTEX may be a bit undervalued, certainly considering the very reasonable score on growth Finally OTEX also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
OTEX had positive earnings in the past year.
OTEX had a positive operating cash flow in the past year.
In the past 5 years OTEX has always been profitable.
Each year in the past 5 years OTEX had a positive operating cash flow.
1.2 Ratios
The Return On Assets of OTEX (3.70%) is better than 74.60% of its industry peers.
OTEX's Return On Equity of 12.61% is amongst the best of the industry. OTEX outperforms 82.54% of its industry peers.
OTEX has a better Return On Invested Capital (7.53%) than 74.60% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for OTEX is significantly below the industry average of 11.54%.
The 3 year average ROIC (6.00%) for OTEX is below the current ROIC(7.53%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.7% | ||
| ROE | 12.61% | ||
| ROIC | 7.53% |
ROA(3y)2.44%
ROA(5y)2.89%
ROE(3y)8.64%
ROE(5y)8.67%
ROIC(3y)6%
ROIC(5y)6.21%
1.3 Margins
With an excellent Profit Margin value of 9.60%, OTEX belongs to the best of the industry, outperforming 82.54% of the companies in the same industry.
OTEX's Profit Margin has improved in the last couple of years.
OTEX's Operating Margin of 20.73% is amongst the best of the industry. OTEX outperforms 88.89% of its industry peers.
OTEX's Operating Margin has been stable in the last couple of years.
The Gross Margin of OTEX (72.51%) is better than 74.60% of its industry peers.
In the last couple of years the Gross Margin of OTEX has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.73% | ||
| PM (TTM) | 9.6% | ||
| GM | 72.51% |
OM growth 3Y0.5%
OM growth 5Y0.68%
PM growth 3Y-9.47%
PM growth 5Y2.29%
GM growth 3Y1.26%
GM growth 5Y1.3%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), OTEX is destroying value.
OTEX has less shares outstanding than it did 1 year ago.
OTEX has less shares outstanding than it did 5 years ago.
The debt/assets ratio for OTEX is higher compared to a year ago.
2.2 Solvency
OTEX has an Altman-Z score of 1.36. This is a bad value and indicates that OTEX is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 1.36, OTEX perfoms like the industry average, outperforming 42.86% of the companies in the same industry.
The Debt to FCF ratio of OTEX is 7.04, which is on the high side as it means it would take OTEX, 7.04 years of fcf income to pay off all of its debts.
OTEX's Debt to FCF ratio of 7.04 is fine compared to the rest of the industry. OTEX outperforms 66.67% of its industry peers.
A Debt/Equity ratio of 1.60 is on the high side and indicates that OTEX has dependencies on debt financing.
The Debt to Equity ratio of OTEX (1.60) is worse than 69.84% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.6 | ||
| Debt/FCF | 7.04 | ||
| Altman-Z | 1.36 |
ROIC/WACC0.77
WACC9.73%
2.3 Liquidity
OTEX has a Current Ratio of 0.87. This is a bad value and indicates that OTEX is not financially healthy enough and could expect problems in meeting its short term obligations.
OTEX's Current ratio of 0.87 is on the low side compared to the rest of the industry. OTEX is outperformed by 68.25% of its industry peers.
OTEX has a Quick Ratio of 0.87. This is a bad value and indicates that OTEX is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of OTEX (0.87) is worse than 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.87 |
3. Growth
3.1 Past
The earnings per share for OTEX have decreased by -3.42% in the last year.
The Earnings Per Share has been growing slightly by 5.79% on average over the past years.
The Revenue has decreased by -7.58% in the past year.
Measured over the past years, OTEX shows a quite strong growth in Revenue. The Revenue has been growing by 10.69% on average per year.
EPS 1Y (TTM)-3.42%
EPS 3Y5.95%
EPS 5Y5.79%
EPS Q2Q%12.9%
Revenue 1Y (TTM)-7.58%
Revenue growth 3Y13.94%
Revenue growth 5Y10.69%
Sales Q2Q%1.51%
3.2 Future
OTEX is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.33% yearly.
Based on estimates for the next years, OTEX will show a small growth in Revenue. The Revenue will grow by 4.54% on average per year.
EPS Next Y9.76%
EPS Next 2Y9.3%
EPS Next 3Y8.33%
EPS Next 5YN/A
Revenue Next Year1.62%
Revenue Next 2Y1.69%
Revenue Next 3Y1.48%
Revenue Next 5Y4.54%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 8.49 indicates a reasonable valuation of OTEX.
93.65% of the companies in the same industry are more expensive than OTEX, based on the Price/Earnings ratio.
OTEX's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.15.
A Price/Forward Earnings ratio of 7.33 indicates a rather cheap valuation of OTEX.
Compared to the rest of the industry, the Price/Forward Earnings ratio of OTEX indicates a rather cheap valuation: OTEX is cheaper than 87.30% of the companies listed in the same industry.
OTEX's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 36.22.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.49 | ||
| Fwd PE | 7.33 |
4.2 Price Multiples
OTEX's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. OTEX is cheaper than 79.37% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, OTEX is valued cheaply inside the industry as 92.06% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.33 | ||
| EV/EBITDA | 8.04 |
4.3 Compensation for Growth
OTEX's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of OTEX may justify a higher PE ratio.
PEG (NY)0.87
PEG (5Y)1.47
EPS Next 2Y9.3%
EPS Next 3Y8.33%
5. Dividend
5.1 Amount
OTEX has a Yearly Dividend Yield of 2.87%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.68, OTEX pays a better dividend. On top of this OTEX pays more dividend than 98.41% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, OTEX pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.87% |
5.2 History
On average, the dividend of OTEX grows each year by 8.34%, which is quite nice.
OTEX has paid a dividend for at least 10 years, which is a reliable track record.
OTEX has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)8.34%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
54.34% of the earnings are spent on dividend by OTEX. This is a bit on the high side, but may be sustainable.
The dividend of OTEX is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP54.34%
EPS Next 2Y9.3%
EPS Next 3Y8.33%
TSX:OTEX (12/2/2025, 7:00:00 PM)
46.94
-0.11 (-0.23%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners80.71%
Inst Owner ChangeN/A
Ins Owners2.08%
Ins Owner ChangeN/A
Market Cap11.83B
Revenue(TTM)5.19B
Net Income(TTM)498.12M
Analysts78
Price Target62.82 (33.83%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.87% |
Yearly Dividend1.46
Dividend Growth(5Y)8.34%
DP54.34%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)9.93%
Min EPS beat(2)4.13%
Max EPS beat(2)15.74%
EPS beat(4)4
Avg EPS beat(4)11.61%
Min EPS beat(4)4.13%
Max EPS beat(4)17.92%
EPS beat(8)6
Avg EPS beat(8)6.82%
EPS beat(12)10
Avg EPS beat(12)10.63%
EPS beat(16)12
Avg EPS beat(16)8.08%
Revenue beat(2)0
Avg Revenue beat(2)-0.66%
Min Revenue beat(2)-0.91%
Max Revenue beat(2)-0.42%
Revenue beat(4)0
Avg Revenue beat(4)-1.5%
Min Revenue beat(4)-4.03%
Max Revenue beat(4)-0.42%
Revenue beat(8)1
Avg Revenue beat(8)-1.88%
Revenue beat(12)3
Avg Revenue beat(12)-1.07%
Revenue beat(16)3
Avg Revenue beat(16)-1.18%
PT rev (1m)0%
PT rev (3m)11.8%
EPS NQ rev (1m)-4.84%
EPS NQ rev (3m)-4.98%
EPS NY rev (1m)-0.21%
EPS NY rev (3m)-0.41%
Revenue NQ rev (1m)-3.6%
Revenue NQ rev (3m)-3.52%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-0.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.49 | ||
| Fwd PE | 7.33 | ||
| P/S | 1.63 | ||
| P/FCF | 9.33 | ||
| P/OCF | 8 | ||
| P/B | 2.14 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.04 |
EPS(TTM)5.53
EY11.78%
EPS(NY)6.41
Fwd EY13.65%
FCF(TTM)5.03
FCFY10.72%
OCF(TTM)5.87
OCFY12.5%
SpS28.83
BVpS21.95
TBVpS-29.69
PEG (NY)0.87
PEG (5Y)1.47
Graham Number52.27
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.7% | ||
| ROE | 12.61% | ||
| ROCE | 9.76% | ||
| ROIC | 7.53% | ||
| ROICexc | 8.36% | ||
| ROICexgc | 131.42% | ||
| OM | 20.73% | ||
| PM (TTM) | 9.6% | ||
| GM | 72.51% | ||
| FCFM | 17.46% |
ROA(3y)2.44%
ROA(5y)2.89%
ROE(3y)8.64%
ROE(5y)8.67%
ROIC(3y)6%
ROIC(5y)6.21%
ROICexc(3y)6.7%
ROICexc(5y)7.26%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)7.77%
ROCE(5y)8.05%
ROICexgc growth 3Y40.72%
ROICexgc growth 5Y10.07%
ROICexc growth 3Y2.2%
ROICexc growth 5Y2.95%
OM growth 3Y0.5%
OM growth 5Y0.68%
PM growth 3Y-9.47%
PM growth 5Y2.29%
GM growth 3Y1.26%
GM growth 5Y1.3%
F-Score6
Asset Turnover0.38
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.6 | ||
| Debt/FCF | 7.04 | ||
| Debt/EBITDA | 3.7 | ||
| Cap/Depr | 23.51% | ||
| Cap/Sales | 2.9% | ||
| Interest Coverage | 3.06 | ||
| Cash Conversion | 61.57% | ||
| Profit Quality | 181.84% | ||
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.87 | ||
| Altman-Z | 1.36 |
F-Score6
WACC9.73%
ROIC/WACC0.77
Cap/Depr(3y)20.3%
Cap/Depr(5y)18.32%
Cap/Sales(3y)2.76%
Cap/Sales(5y)2.57%
Profit Quality(3y)255.78%
Profit Quality(5y)250.53%
High Growth Momentum
Growth
EPS 1Y (TTM)-3.42%
EPS 3Y5.95%
EPS 5Y5.79%
EPS Q2Q%12.9%
EPS Next Y9.76%
EPS Next 2Y9.3%
EPS Next 3Y8.33%
EPS Next 5YN/A
Revenue 1Y (TTM)-7.58%
Revenue growth 3Y13.94%
Revenue growth 5Y10.69%
Sales Q2Q%1.51%
Revenue Next Year1.62%
Revenue Next 2Y1.69%
Revenue Next 3Y1.48%
Revenue Next 5Y4.54%
EBIT growth 1Y2.5%
EBIT growth 3Y14.51%
EBIT growth 5Y11.45%
EBIT Next Year14.64%
EBIT Next 3Y7.75%
EBIT Next 5YN/A
FCF growth 1Y59.09%
FCF growth 3Y-8.21%
FCF growth 5Y-4.86%
OCF growth 1Y52.11%
OCF growth 3Y-5.42%
OCF growth 5Y-2.74%
OPEN TEXT CORP / OTEX.CA FAQ
What is the ChartMill fundamental rating of OPEN TEXT CORP (OTEX.CA) stock?
ChartMill assigns a fundamental rating of 5 / 10 to OTEX.CA.
Can you provide the valuation status for OPEN TEXT CORP?
ChartMill assigns a valuation rating of 8 / 10 to OPEN TEXT CORP (OTEX.CA). This can be considered as Undervalued.
What is the profitability of OTEX stock?
OPEN TEXT CORP (OTEX.CA) has a profitability rating of 8 / 10.
What is the expected EPS growth for OPEN TEXT CORP (OTEX.CA) stock?
The Earnings per Share (EPS) of OPEN TEXT CORP (OTEX.CA) is expected to grow by 9.76% in the next year.
Is the dividend of OPEN TEXT CORP sustainable?
The dividend rating of OPEN TEXT CORP (OTEX.CA) is 7 / 10 and the dividend payout ratio is 54.34%.