OPEN TEXT CORP (OTEX.CA) Fundamental Analysis & Valuation
TSX:OTEX • CA6837151068
34.2 CAD
+0.36 (+1.06%)
Last: Mar 4, 2026, 07:00 PM
This OTEX.CA fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
We assign a fundamental rating of 6 out of 10 to OTEX. OTEX was compared to 70 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 scores decently on growth, while it is valued quite cheap. This could make an interesting combination. OTEX also has an excellent dividend rating.
1. OTEX.CA Profitability Analysis
1.1 Basic Checks
- OTEX had positive earnings in the past year.
- In the past year OTEX had a positive cash flow from operations.
- 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
- OTEX has a better Return On Assets (3.22%) than 70.00% of its industry peers.
- The Return On Equity of OTEX (10.79%) is better than 78.57% of its industry peers.
- With a decent Return On Invested Capital value of 7.50%, OTEX is doing good in the industry, outperforming 71.43% of the companies in the same industry.
- OTEX had an Average Return On Invested Capital over the past 3 years of 6.00%. This is significantly below the industry average of 12.20%.
- The 3 year average ROIC (6.00%) for OTEX is below the current ROIC(7.50%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.22% | ||
| ROE | 10.79% | ||
| ROIC | 7.5% |
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 a decent Profit Margin value of 8.42%, OTEX is doing good in the industry, outperforming 80.00% of the companies in the same industry.
- OTEX's Profit Margin has improved in the last couple of years.
- With an excellent Operating Margin value of 20.78%, OTEX belongs to the best of the industry, outperforming 88.57% of the companies in the same industry.
- In the last couple of years the Operating Margin of OTEX has remained more or less at the same level.
- OTEX has a better Gross Margin (72.70%) than 74.29% of its industry peers.
- OTEX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.78% | ||
| PM (TTM) | 8.42% | ||
| GM | 72.7% |
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. OTEX.CA Health Analysis
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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.
- Compared to 1 year ago, OTEX has a worse debt to assets ratio.
2.2 Solvency
- OTEX has an Altman-Z score of 1.23. This is a bad value and indicates that OTEX is not financially healthy and even has some risk of bankruptcy.
- OTEX's Altman-Z score of 1.23 is in line compared to the rest of the industry. OTEX outperforms 50.00% of its industry peers.
- The Debt to FCF ratio of OTEX is 7.25, which is on the high side as it means it would take OTEX, 7.25 years of fcf income to pay off all of its debts.
- OTEX's Debt to FCF ratio of 7.25 is fine compared to the rest of the industry. OTEX outperforms 65.71% of its industry peers.
- OTEX has a Debt/Equity ratio of 1.57. This is a high value indicating a heavy dependency on external financing.
- With a Debt to Equity ratio value of 1.57, OTEX is not doing good in the industry: 64.29% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.57 | ||
| Debt/FCF | 7.25 | ||
| Altman-Z | 1.23 |
ROIC/WACC0.75
WACC10%
2.3 Liquidity
- A Current Ratio of 0.94 indicates that OTEX may have some problems paying its short term obligations.
- With a Current ratio value of 0.94, OTEX perfoms like the industry average, outperforming 42.86% of the companies in the same industry.
- A Quick Ratio of 0.94 indicates that OTEX may have some problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 0.94, OTEX is in line with its industry, outperforming 42.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.94 |
3. OTEX.CA Growth Analysis
3.1 Past
- OTEX shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.25%.
- Measured over the past 5 years, OTEX shows a small growth in Earnings Per Share. The EPS has been growing by 5.79% on average per year.
- OTEX shows a decrease in Revenue. In the last year, the revenue decreased by -4.30%.
- 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)0.25%
EPS 3Y5.95%
EPS 5Y5.79%
EPS Q2Q%1.8%
Revenue 1Y (TTM)-4.3%
Revenue growth 3Y13.94%
Revenue growth 5Y10.69%
Sales Q2Q%-0.58%
3.2 Future
- Based on estimates for the next years, OTEX will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.33% on average per year.
- The Revenue is expected to grow by 4.54% on average over the next years.
EPS Next Y9.99%
EPS Next 2Y9.09%
EPS Next 3Y8.33%
EPS Next 5YN/A
Revenue Next Year1.32%
Revenue Next 2Y1.18%
Revenue Next 3Y1.13%
Revenue Next 5Y4.54%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- 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. OTEX.CA Valuation Analysis
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 6.31, the valuation of OTEX can be described as very cheap.
- Based on the Price/Earnings ratio, OTEX is valued cheaper than 88.57% of the companies in the same industry.
- When comparing the Price/Earnings ratio of OTEX to the average of the S&P500 Index (26.74), we can say OTEX is valued rather cheaply.
- OTEX is valuated cheaply with a Price/Forward Earnings ratio of 5.49.
- Based on the Price/Forward Earnings ratio, OTEX is valued cheaply inside the industry as 88.57% of the companies are valued more expensively.
- OTEX is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.82, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.31 | ||
| Fwd PE | 5.49 |
4.2 Price Multiples
- 80.00% of the companies in the same industry are more expensive than OTEX, based on the Enterprise Value to EBITDA ratio.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of OTEX indicates a rather cheap valuation: OTEX is cheaper than 91.43% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.14 | ||
| EV/EBITDA | 6.64 |
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.
- OTEX has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)0.63
PEG (5Y)1.09
EPS Next 2Y9.09%
EPS Next 3Y8.33%
5. OTEX.CA Dividend Analysis
5.1 Amount
- OTEX has a Yearly Dividend Yield of 3.95%. Purely for dividend investing, there may be better candidates out there.
- The stock price of OTEX dropped by -26.23% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
- Compared to an average industry Dividend Yield of 0.27, OTEX pays a better dividend. On top of this OTEX pays more dividend than 98.57% of the companies listed in the same industry.
- OTEX's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.95% |
5.2 History
- On average, the dividend of OTEX grows each year by 8.34%, which is quite nice.
- OTEX has been paying a dividend for at least 10 years, so it has a reliable track record.
- OTEX has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)8.34%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
- OTEX pays out 62.08% of its income as dividend. This is not a sustainable payout ratio.
- The dividend of OTEX is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP62.08%
EPS Next 2Y9.09%
EPS Next 3Y8.33%
OTEX.CA Fundamentals: All Metrics, Ratios and Statistics
TSX:OTEX (3/4/2026, 7:00:00 PM)
34.2
+0.36 (+1.06%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)02-05 2026-02-05/amc
Earnings (Next)04-28 2026-04-28/amc
Inst Owners82.98%
Inst Owner ChangeN/A
Ins Owners1.48%
Ins Owner ChangeN/A
Market Cap8.57B
Revenue(TTM)5.18B
Net Income(TTM)436.35M
Analysts78
Price Target55.08 (61.05%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.95% |
Yearly Dividend1.42
Dividend Growth(5Y)8.34%
DP62.08%
Div Incr Years11
Div Non Decr Years11
Ex-Date03-06 2026-03-06 (0.275)
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.64%
Min EPS beat(2)4.13%
Max EPS beat(2)9.15%
EPS beat(4)4
Avg EPS beat(4)9.41%
Min EPS beat(4)4.13%
Max EPS beat(4)15.74%
EPS beat(8)6
Avg EPS beat(8)7.76%
EPS beat(12)10
Avg EPS beat(12)10.45%
EPS beat(16)13
Avg EPS beat(16)8.72%
Revenue beat(2)1
Avg Revenue beat(2)0.03%
Min Revenue beat(2)-0.91%
Max Revenue beat(2)0.97%
Revenue beat(4)1
Avg Revenue beat(4)-1.1%
Min Revenue beat(4)-4.03%
Max Revenue beat(4)0.97%
Revenue beat(8)1
Avg Revenue beat(8)-1.8%
Revenue beat(12)3
Avg Revenue beat(12)-1.07%
Revenue beat(16)4
Avg Revenue beat(16)-1.04%
PT rev (1m)0%
PT rev (3m)-12.32%
EPS NQ rev (1m)-7.86%
EPS NQ rev (3m)-6.13%
EPS NY rev (1m)0%
EPS NY rev (3m)0.21%
Revenue NQ rev (1m)-1.22%
Revenue NQ rev (3m)-1.52%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)-0.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.31 | ||
| Fwd PE | 5.49 | ||
| P/S | 1.21 | ||
| P/FCF | 7.14 | ||
| P/OCF | 6.11 | ||
| P/B | 1.55 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.64 |
EPS(TTM)5.42
EY15.85%
EPS(NY)6.23
Fwd EY18.2%
FCF(TTM)4.79
FCFY14%
OCF(TTM)5.6
OCFY16.36%
SpS28.23
BVpS22.04
TBVpS-27.91
PEG (NY)0.63
PEG (5Y)1.09
Graham Number51.84
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.22% | ||
| ROE | 10.79% | ||
| ROCE | 9.73% | ||
| ROIC | 7.5% | ||
| ROICexc | 8.47% | ||
| ROICexgc | 131.7% | ||
| OM | 20.78% | ||
| PM (TTM) | 8.42% | ||
| GM | 72.7% | ||
| FCFM | 16.96% |
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 | 1.57 | ||
| Debt/FCF | 7.25 | ||
| Debt/EBITDA | 3.7 | ||
| Cap/Depr | 23.26% | ||
| Cap/Sales | 2.86% | ||
| Interest Coverage | 3.2 | ||
| Cash Conversion | 59.91% | ||
| Profit Quality | 201.32% | ||
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.94 | ||
| Altman-Z | 1.23 |
F-Score6
WACC10%
ROIC/WACC0.75
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)0.25%
EPS 3Y5.95%
EPS 5Y5.79%
EPS Q2Q%1.8%
EPS Next Y9.99%
EPS Next 2Y9.09%
EPS Next 3Y8.33%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.3%
Revenue growth 3Y13.94%
Revenue growth 5Y10.69%
Sales Q2Q%-0.58%
Revenue Next Year1.32%
Revenue Next 2Y1.18%
Revenue Next 3Y1.13%
Revenue Next 5Y4.54%
EBIT growth 1Y2.28%
EBIT growth 3Y14.51%
EBIT growth 5Y11.45%
EBIT Next Year14.58%
EBIT Next 3Y7.06%
EBIT Next 5YN/A
FCF growth 1Y23.42%
FCF growth 3Y-8.21%
FCF growth 5Y-4.86%
OCF growth 1Y20.83%
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 6 / 10 to OTEX.CA.
What is the valuation status of OPEN TEXT CORP (OTEX.CA) stock?
ChartMill assigns a valuation rating of 9 / 10 to OPEN TEXT CORP (OTEX.CA). This can be considered as Undervalued.
Can you provide the profitability details for OPEN TEXT CORP?
OPEN TEXT CORP (OTEX.CA) has a profitability rating of 7 / 10.
What are the PE and PB ratios of OPEN TEXT CORP (OTEX.CA) stock?
The Price/Earnings (PE) ratio for OPEN TEXT CORP (OTEX.CA) is 6.31 and the Price/Book (PB) ratio is 1.55.
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 62.08%.