OPEN TEXT CORP (OTEX.CA) Fundamental Analysis & Valuation
TSX:OTEX • CA6837151068
Current stock price
31.51 CAD
+0.72 (+2.34%)
Last:
This OTEX.CA fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
1. OTEX.CA Profitability Analysis
1.1 Basic Checks
- OTEX had positive earnings in the past year.
- OTEX had a positive operating cash flow in the past year.
- Each year in the past 5 years OTEX has been profitable.
- OTEX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- OTEX has a Return On Assets of 3.22%. This is in the better half of the industry: OTEX outperforms 72.46% of its industry peers.
- With a decent Return On Equity value of 10.79%, OTEX is doing good in the industry, outperforming 76.81% of the companies in the same industry.
- OTEX has a Return On Invested Capital of 7.50%. This is in the better half of the industry: OTEX outperforms 71.01% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for OTEX is significantly below the industry average of 12.70%.
- The last Return On Invested Capital (7.50%) for OTEX is above the 3 year average (6.00%), which is a sign of increasing profitability.
| 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
- Looking at the Profit Margin, with a value of 8.42%, OTEX is in the better half of the industry, outperforming 76.81% of the companies in the same industry.
- OTEX's Profit Margin has improved in the last couple of years.
- The Operating Margin of OTEX (20.78%) is better than 86.96% of its industry peers.
- OTEX's Operating Margin has been stable in the last couple of years.
- The Gross Margin of OTEX (72.70%) is better than 72.46% 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 | 20.78% | ||
| 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.
- OTEX has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for OTEX has been reduced compared to 5 years ago.
- Compared to 1 year ago, OTEX has a worse debt to assets ratio.
2.2 Solvency
- Based on the Altman-Z score of 1.19, we must say that OTEX is in the distress zone and has some risk of bankruptcy.
- The Altman-Z score of OTEX (1.19) is comparable to the rest of the industry.
- OTEX has a debt to FCF ratio of 7.25. This is a slightly negative value and a sign of low solvency as OTEX would need 7.25 years to pay back of all of its debts.
- With a decent Debt to FCF ratio value of 7.25, OTEX is doing good in the industry, outperforming 65.22% of the companies in the same industry.
- A Debt/Equity ratio of 1.57 is on the high side and indicates that OTEX has dependencies on debt financing.
- The Debt to Equity ratio of OTEX (1.57) is worse than 63.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.57 | ||
| Debt/FCF | 7.25 | ||
| Altman-Z | 1.19 |
ROIC/WACC0.78
WACC9.66%
2.3 Liquidity
- OTEX has a Current Ratio of 0.94. 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 has a Current ratio (0.94) which is comparable to the rest of the 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 42.03% 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
- The Earnings Per Share has been growing slightly by 0.25% over the past year.
- The Earnings Per Share has been growing slightly by 5.79% on average over the past years.
- 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
- The Earnings Per Share is expected to grow by 15.35% on average over the next years. This is quite good.
- 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 Y10.07%
EPS Next 2Y7.76%
EPS Next 3Y15.35%
EPS Next 5YN/A
Revenue Next Year1.33%
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.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. OTEX.CA Valuation Analysis
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 5.80, the valuation of OTEX can be described as very cheap.
- Compared to the rest of the industry, the Price/Earnings ratio of OTEX indicates a rather cheap valuation: OTEX is cheaper than 89.86% of the companies listed in the same industry.
- When comparing the Price/Earnings ratio of OTEX to the average of the S&P500 Index (26.64), we can say OTEX is valued rather cheaply.
- OTEX is valuated cheaply with a Price/Forward Earnings ratio of 5.18.
- OTEX's Price/Forward Earnings ratio is rather cheap when compared to the industry. OTEX is cheaper than 86.96% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of OTEX to the average of the S&P500 Index (21.36), we can say OTEX is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.8 | ||
| Fwd PE | 5.18 |
4.2 Price Multiples
- OTEX's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. OTEX is cheaper than 79.71% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, OTEX is valued cheaply inside the industry as 89.86% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.58 | ||
| EV/EBITDA | 6.27 |
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 decent profitability rating of OTEX may justify a higher PE ratio.
- OTEX's earnings are expected to grow with 15.35% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.58
PEG (5Y)1
EPS Next 2Y7.76%
EPS Next 3Y15.35%
5. OTEX.CA Dividend Analysis
5.1 Amount
- OTEX has a Yearly Dividend Yield of 4.44%, which is a nice return.
- OTEX's Dividend Yield is rather good when compared to the industry average which is at 0.47. OTEX pays more dividend than 97.10% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, OTEX pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.44% |
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 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 Years12
Div Non Decr Years12
5.3 Sustainability
- OTEX pays out 62.08% of its income as dividend. This is not a sustainable payout ratio.
- OTEX's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP62.08%
EPS Next 2Y7.76%
EPS Next 3Y15.35%
OTEX.CA Fundamentals: All Metrics, Ratios and Statistics
TSX:OTEX (5/1/2026, 7:00:00 PM)
31.51
+0.72 (+2.34%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Industry Strength11.81
Industry Growth43.28
Earnings (Last)02-05 2026-02-05/amc
Earnings (Next)05-07 2026-05-07/amc
Inst Owners90.95%
Inst Owner ChangeN/A
Ins Owners1.49%
Ins Owner ChangeN/A
Market Cap7.90B
Revenue(TTM)5.18B
Net Income(TTM)436.35M
Analysts78
Price Target55.08 (74.8%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.44% |
Yearly Dividend1.42
Dividend Growth(5Y)8.34%
DP62.08%
Div Incr Years12
Div Non Decr Years12
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)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-7.84%
EPS NY rev (1m)0%
EPS NY rev (3m)0.07%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.22%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.8 | ||
| Fwd PE | 5.18 | ||
| P/S | 1.12 | ||
| P/FCF | 6.58 | ||
| P/OCF | 5.63 | ||
| P/B | 1.43 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.27 |
EPS(TTM)5.43
EY17.23%
EPS(NY)6.08
Fwd EY19.29%
FCF(TTM)4.79
FCFY15.21%
OCF(TTM)5.6
OCFY17.77%
SpS28.25
BVpS22.05
TBVpS-27.93
PEG (NY)0.58
PEG (5Y)1
Graham Number51.9078 (64.73%)
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 | 1.19 |
F-Score6
WACC9.66%
ROIC/WACC0.78
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 Y10.07%
EPS Next 2Y7.76%
EPS Next 3Y15.35%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.3%
Revenue growth 3Y13.94%
Revenue growth 5Y10.69%
Sales Q2Q%-0.58%
Revenue Next Year1.33%
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 Year14.4%
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 Fundamental Analysis 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.
How profitable is OPEN TEXT CORP (OTEX.CA) stock?
OPEN TEXT CORP (OTEX.CA) has a profitability rating of 7 / 10.
Can you provide the financial health for OTEX stock?
The financial health rating of OPEN TEXT CORP (OTEX.CA) is 3 / 10.
Is the dividend of OPEN TEXT CORP sustainable?
The dividend rating of OPEN TEXT CORP (OTEX.CA) is 8 / 10 and the dividend payout ratio is 62.08%.