OPEN TEXT CORP (OTEX.CA) Stock Fundamental Analysis
Canada - TSX:OTEX - CA6837151068 - Common Stock
48.71 CAD
+0.22 (+0.45%)
OTEX gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 63 industry peers in the Software industry. OTEX scores excellent on profitability, but there are 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.
In the past year OTEX had a positive cash flow from operations.
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 3.16%. This is in the better half of the industry: OTEX outperforms 66.67% of its industry peers.
With a decent Return On Equity value of 11.09%, OTEX is doing good in the industry, outperforming 79.37% of the companies in the same industry.
OTEX has a better Return On Invested Capital (7.26%) 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 12.38%.
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
OTEX has a better Profit Margin (8.43%) than 80.95% of its industry peers.
In the last couple of years the Profit Margin of OTEX has grown nicely.
OTEX has a Operating Margin of 20.09%. This is amongst the best in the industry. OTEX outperforms 88.89% of its industry peers.
In the last couple of years the Operating Margin of OTEX has remained more or less at the same level.
OTEX has a Gross Margin of 72.25%. This is in the better half of the industry: OTEX outperforms 73.02% of its industry peers.
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
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.
Compared to 5 years ago, OTEX has less shares outstanding
OTEX has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.31, we must say that OTEX is in the distress zone and has some risk of bankruptcy.
OTEX has a Altman-Z score of 1.31. This is comparable to the rest of the industry: OTEX outperforms 42.86% 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.
OTEX has a better Debt to FCF ratio (9.28) than 63.49% of its industry peers.
A Debt/Equity ratio of 1.61 is on the high side and indicates that OTEX has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.61, OTEX is doing worse than 69.84% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.61 | ||
| Debt/FCF | 9.28 | ||
| Altman-Z | 1.31 |
ROIC/WACC0.74
WACC9.88%
2.3 Liquidity
A Current Ratio of 0.80 indicates that OTEX may have some problems paying its short term obligations.
OTEX's Current ratio of 0.80 is on the low side compared to the rest of the industry. OTEX is outperformed by 66.67% of its industry peers.
A Quick Ratio of 0.80 indicates that OTEX may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.80, OTEX is doing worse than 65.08% of the companies in the same industry.
| 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 -3.42%.
The Earnings Per Share has been growing slightly by 5.79% on average over the past years.
OTEX shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -10.42%.
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)-10.42%
Revenue growth 3Y13.94%
Revenue growth 5Y10.69%
Sales Q2Q%1.51%
3.2 Future
OTEX is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.42% yearly.
OTEX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.54% yearly.
EPS Next Y9.76%
EPS Next 2Y9.3%
EPS Next 3Y7.42%
EPS Next 5YN/A
Revenue Next Year1.62%
Revenue Next 2Y1.69%
Revenue Next 3Y1.56%
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. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 8.81 indicates a reasonable valuation of OTEX.
Compared to the rest of the industry, the Price/Earnings ratio of OTEX indicates a rather cheap valuation: OTEX is cheaper than 95.24% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.28. OTEX is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 7.60, which indicates a rather cheap valuation of OTEX.
Based on the Price/Forward Earnings ratio, OTEX is valued cheaper than 88.89% of the companies in the same industry.
OTEX is valuated cheaply when we compare the Price/Forward Earnings ratio to 33.61, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.81 | ||
| Fwd PE | 7.6 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, OTEX is valued a bit cheaper than 77.78% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, OTEX is valued cheaply inside the industry as 84.13% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.86 | ||
| EV/EBITDA | 8.37 |
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.
PEG (NY)0.9
PEG (5Y)1.52
EPS Next 2Y9.3%
EPS Next 3Y7.42%
5. Dividend
5.1 Amount
OTEX has a Yearly Dividend Yield of 2.67%.
OTEX's Dividend Yield is rather good when compared to the industry average which is at 1.51. OTEX pays more dividend than 98.41% of the companies in the same industry.
OTEX's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.67% |
5.2 History
The dividend of OTEX is nicely growing with an annual growth rate of 8.34%!
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 Years11
Div Non Decr Years11
5.3 Sustainability
OTEX pays out 62.29% 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.
DP62.29%
EPS Next 2Y9.3%
EPS Next 3Y7.42%
TSX:OTEX (11/10/2025, 7:00:00 PM)
48.71
+0.22 (+0.45%)
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 Cap12.39B
Revenue(TTM)5.17B
Net Income(TTM)435.87M
Analysts78
Price Target62.82 (28.97%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.67% |
Yearly Dividend1.47
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)0%
PT rev (3m)11.8%
EPS NQ rev (1m)0.02%
EPS NQ rev (3m)9.84%
EPS NY rev (1m)-0.21%
EPS NY rev (3m)1.1%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.96%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.81 | ||
| Fwd PE | 7.6 | ||
| P/S | 1.71 | ||
| P/FCF | 12.86 | ||
| P/OCF | 10.64 | ||
| P/B | 2.25 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.37 |
EPS(TTM)5.53
EY11.35%
EPS(NY)6.41
Fwd EY13.16%
FCF(TTM)3.79
FCFY7.78%
OCF(TTM)4.58
OCFY9.39%
SpS28.48
BVpS21.65
TBVpS-30.66
PEG (NY)0.9
PEG (5Y)1.52
Graham Number51.9
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%
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-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 | 1.31 |
F-Score4
WACC9.88%
ROIC/WACC0.74
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 3Y7.42%
EPS Next 5YN/A
Revenue 1Y (TTM)-10.42%
Revenue growth 3Y13.94%
Revenue growth 5Y10.69%
Sales Q2Q%1.51%
Revenue Next Year1.62%
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%
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 7 / 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 6 / 10 and the dividend payout ratio is 62.29%.