OPEN TEXT CORP (OTEX.CA) Stock Fundamental Analysis
Canada - TSX:OTEX - CA6837151068 - Common Stock
54.69 CAD
+0.15 (+0.28%)
We assign a fundamental rating of 5 out of 10 to OTEX. OTEX was compared to 62 industry peers in the Software industry. While OTEX has a great profitability rating, there are quite some concerns on its financial health. OTEX is valued quite cheap, while showing a decent growth score. This is a good combination!
1. Profitability
1.1 Basic Checks
In the past year OTEX was profitable.
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 (3.16%) is better than 66.13% of its industry peers.
With an excellent Return On Equity value of 11.09%, OTEX belongs to the best of the industry, outperforming 80.65% of the companies in the same industry.
OTEX's Return On Invested Capital of 7.26% is fine compared to the rest of the industry. OTEX outperforms 75.81% of its industry peers.
The Average Return On Invested Capital over the past 3 years for OTEX is significantly below the industry average of 12.35%.
The last Return On Invested Capital (7.26%) for OTEX is above the 3 year average (6.00%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.16% | ||
| ROE | 11.09% | ||
| ROIC | 7.26% |
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 8.43%, OTEX belongs to the best of the industry, outperforming 82.26% of the companies in the same industry.
OTEX's Profit Margin has improved in the last couple of years.
OTEX has a Operating Margin of 20.09%. This is amongst the best in the industry. OTEX outperforms 90.32% of its industry peers.
In the last couple of years the Operating Margin of OTEX has remained more or less at the same level.
With a decent Gross Margin value of 72.25%, OTEX is doing good in the industry, outperforming 74.19% of the companies in the same industry.
OTEX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.09% | ||
| PM (TTM) | 8.43% | ||
| GM | 72.25% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so OTEX is destroying value.
Compared to 1 year ago, OTEX has less shares outstanding
OTEX has less shares outstanding than it did 5 years ago.
OTEX has a worse debt/assets ratio than last year.
2.2 Solvency
OTEX has an Altman-Z score of 1.38. This is a bad value and indicates that OTEX is not financially healthy and even has some risk of bankruptcy.
OTEX has a Altman-Z score of 1.38. This is comparable to the rest of the industry: OTEX outperforms 43.55% of its industry peers.
The Debt to FCF ratio of OTEX is 9.28, which is on the high side as it means it would take OTEX, 9.28 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 9.28, OTEX is doing good in the industry, outperforming 64.52% of the companies in the same industry.
OTEX has a Debt/Equity ratio of 1.61. This is a high value indicating a heavy dependency on external financing.
OTEX's Debt to Equity ratio of 1.61 is on the low side compared to the rest of the industry. OTEX is outperformed by 69.35% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.61 | ||
| Debt/FCF | 9.28 | ||
| Altman-Z | 1.38 |
ROIC/WACC0.7
WACC10.37%
2.3 Liquidity
A Current Ratio of 0.80 indicates that OTEX may have some problems paying its short term obligations.
With a Current ratio value of 0.80, OTEX is not doing good in the industry: 66.13% of the companies in the same industry are doing better.
OTEX has a Quick Ratio of 0.80. 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 (0.80) is worse than 64.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
OTEX shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.15%.
OTEX shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.79% yearly.
Looking at the last year, OTEX shows a very negative growth in Revenue. The Revenue has decreased by -10.42% in the last year.
The Revenue has been growing by 10.69% on average over the past years. This is quite good.
EPS 1Y (TTM)-8.15%
EPS 3Y5.95%
EPS 5Y5.79%
EPS Q2Q%-1.02%
Revenue 1Y (TTM)-10.42%
Revenue growth 3Y13.94%
Revenue growth 5Y10.69%
Sales Q2Q%-3.79%
3.2 Future
Based on estimates for the next years, OTEX will show a small growth in Earnings Per Share. The EPS will grow by 7.42% on average per year.
OTEX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.54% yearly.
EPS Next Y9.99%
EPS Next 2Y9.19%
EPS Next 3Y7.42%
EPS Next 5YN/A
Revenue Next Year1.66%
Revenue Next 2Y1.69%
Revenue Next 3Y1.56%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 10.17 indicates a reasonable valuation of OTEX.
Based on the Price/Earnings ratio, OTEX is valued cheaply inside the industry as 93.55% of the companies are valued more expensively.
OTEX's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.40.
A Price/Forward Earnings ratio of 9.24 indicates a reasonable valuation of OTEX.
91.94% of the companies in the same industry are more expensive than OTEX, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.94, OTEX is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.17 | ||
| Fwd PE | 9.24 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, OTEX is valued cheaper than 80.65% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, OTEX is valued cheaply inside the industry as 85.48% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.4 | ||
| EV/EBITDA | 8.99 |
4.3 Compensation for Growth
OTEX's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of OTEX may justify a higher PE ratio.
PEG (NY)1.02
PEG (5Y)1.75
EPS Next 2Y9.19%
EPS Next 3Y7.42%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.45%, OTEX has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.48, OTEX pays a better dividend. On top of this OTEX pays more dividend than 98.39% of the companies listed in the same industry.
OTEX's Dividend Yield is comparable with the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.45% |
5.2 History
The dividend of OTEX is nicely growing with an annual growth rate of 8.34%!
OTEX has been paying a dividend for at least 10 years, so it has 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
62.29% of the earnings are spent on dividend by OTEX. This is not a sustainable payout ratio.
OTEX's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP62.29%
EPS Next 2Y9.19%
EPS Next 3Y7.42%
TSX:OTEX (10/17/2025, 7:00:00 PM)
54.69
+0.15 (+0.28%)
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 Cap13.91B
Analysts78
Price Target62.82 (14.87%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.45% |
Yearly Dividend1.46
Dividend Growth(5Y)8.34%
DP62.29%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)12.19%
Min EPS beat(2)8.64%
Max EPS beat(2)15.74%
EPS beat(4)4
Avg EPS beat(4)13.93%
Min EPS beat(4)8.64%
Max EPS beat(4)17.92%
EPS beat(8)6
Avg EPS beat(8)7.45%
EPS beat(12)9
Avg EPS beat(12)10.2%
EPS beat(16)12
Avg EPS beat(16)7.91%
Revenue beat(2)0
Avg Revenue beat(2)-2.22%
Min Revenue beat(2)-4.03%
Max Revenue beat(2)-0.42%
Revenue beat(4)0
Avg Revenue beat(4)-2.03%
Min Revenue beat(4)-4.03%
Max Revenue beat(4)-0.42%
Revenue beat(8)1
Avg Revenue beat(8)-1.85%
Revenue beat(12)3
Avg Revenue beat(12)-1.03%
Revenue beat(16)3
Avg Revenue beat(16)-1.18%
PT rev (1m)11.8%
PT rev (3m)11.8%
EPS NQ rev (1m)0.51%
EPS NQ rev (3m)9.81%
EPS NY rev (1m)-0.2%
EPS NY rev (3m)1.31%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)1.96%
Revenue NY rev (1m)-0.11%
Revenue NY rev (3m)0.78%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.17 | ||
| Fwd PE | 9.24 | ||
| P/S | 1.92 | ||
| P/FCF | 14.4 | ||
| P/OCF | 11.92 | ||
| P/B | 2.52 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.99 |
EPS(TTM)5.38
EY9.84%
EPS(NY)5.92
Fwd EY10.82%
FCF(TTM)3.8
FCFY6.95%
OCF(TTM)4.59
OCFY8.39%
SpS28.56
BVpS21.71
TBVpS-30.75
PEG (NY)1.02
PEG (5Y)1.75
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.16% | ||
| ROE | 11.09% | ||
| ROCE | 9.42% | ||
| ROIC | 7.26% | ||
| ROICexc | 8.12% | ||
| ROICexgc | 212.78% | ||
| OM | 20.09% | ||
| PM (TTM) | 8.43% | ||
| GM | 72.25% | ||
| FCFM | 13.3% |
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%
ROICexcg growth 3Y40.72%
ROICexcg 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-Score4
Asset Turnover0.38
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.61 | ||
| Debt/FCF | 9.28 | ||
| Debt/EBITDA | 3.78 | ||
| Cap/Depr | 22.34% | ||
| Cap/Sales | 2.77% | ||
| Interest Coverage | 2.95 | ||
| Cash Conversion | 49.45% | ||
| Profit Quality | 157.71% | ||
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.8 | ||
| Altman-Z | 1.38 |
F-Score4
WACC10.37%
ROIC/WACC0.7
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)-8.15%
EPS 3Y5.95%
EPS 5Y5.79%
EPS Q2Q%-1.02%
EPS Next Y9.99%
EPS Next 2Y9.19%
EPS Next 3Y7.42%
EPS Next 5YN/A
Revenue 1Y (TTM)-10.42%
Revenue growth 3Y13.94%
Revenue growth 5Y10.69%
Sales Q2Q%-3.79%
Revenue Next Year1.66%
Revenue Next 2Y1.69%
Revenue Next 3Y1.56%
Revenue Next 5Y4.54%
EBIT growth 1Y1.58%
EBIT growth 3Y14.51%
EBIT growth 5Y11.45%
EBIT Next Year14.64%
EBIT Next 3Y7.63%
EBIT Next 5YN/A
FCF growth 1Y-14.97%
FCF growth 3Y-8.21%
FCF growth 5Y-4.86%
OCF growth 1Y-14.16%
OCF growth 3Y-5.42%
OCF growth 5Y-2.74%