OPEN TEXT CORP (OTEX) Fundamental Analysis & Valuation
NASDAQ:OTEX • CA6837151068
25.06 USD
+0.31 (+1.25%)
At close: Mar 4, 2026
25.06 USD
0 (0%)
After Hours: 3/4/2026, 4:30:02 PM
This OTEX fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
Taking everything into account, OTEX scores 5 out of 10 in our fundamental rating. OTEX was compared to 276 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! Finally OTEX also has an excellent dividend rating.
1. OTEX 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.
- Each year in the past 5 years OTEX had a positive operating cash flow.
1.2 Ratios
- With a decent Return On Assets value of 3.22%, OTEX is doing good in the industry, outperforming 67.39% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 10.79%, OTEX is in the better half of the industry, outperforming 75.36% of the companies in the same industry.
- OTEX's Return On Invested Capital of 7.50% is fine compared to the rest of the industry. OTEX outperforms 78.99% of its industry peers.
- OTEX had an Average Return On Invested Capital over the past 3 years of 6.00%. This is below the industry average of 10.79%.
- 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
- OTEX has a better Profit Margin (8.42%) than 69.57% of its industry peers.
- In the last couple of years the Profit Margin of OTEX has grown nicely.
- OTEX has a better Operating Margin (20.78%) than 88.77% of its industry peers.
- OTEX's Operating Margin has been stable in the last couple of years.
- OTEX has a Gross Margin (72.70%) which is in line with 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 Health Analysis
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
- Compared to 5 years ago, OTEX has less shares outstanding
- OTEX has a worse debt/assets ratio than last year.
2.2 Solvency
- OTEX has an Altman-Z score of 1.22. 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 1.22, OTEX perfoms like the industry average, outperforming 44.57% of the companies in the same 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.
- OTEX has a Debt to FCF ratio of 7.25. This is comparable to the rest of the industry: OTEX outperforms 51.45% of its industry peers.
- A Debt/Equity ratio of 1.57 is on the high side and indicates that OTEX has dependencies on debt financing.
- OTEX has a Debt to Equity ratio of 1.57. This is amonst the worse of the industry: OTEX underperforms 80.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.57 | ||
| Debt/FCF | 7.25 | ||
| Altman-Z | 1.22 |
ROIC/WACC0.79
WACC9.55%
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.
- Looking at the Current ratio, with a value of 0.94, OTEX is doing worse than 78.26% 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.
- OTEX has a Quick ratio of 0.94. This is in the lower half of the industry: OTEX underperforms 77.90% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.94 |
3. OTEX 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%.
- The Earnings Per Share has been growing slightly by 5.79% on average over the past years.
- Looking at the last year, OTEX shows a decrease in Revenue. The Revenue has decreased by -4.30% in the last year.
- OTEX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.69% yearly.
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 8.33% on average over the next years. This is quite good.
- 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 Valuation Analysis
4.1 Price/Earnings Ratio
- Based on the 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 94.93% of the companies in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 26.83, OTEX is valued rather cheaply.
- OTEX is valuated cheaply with a Price/Forward Earnings ratio of 5.50.
- 94.20% 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 24.95, OTEX is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.31 | ||
| Fwd PE | 5.5 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of OTEX indicates a rather cheap valuation: OTEX is cheaper than 93.48% of the companies listed in the same industry.
- OTEX's Price/Free Cash Flow ratio is rather cheap when compared to the industry. OTEX is cheaper than 94.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.15 | ||
| EV/EBITDA | 6.59 |
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 Dividend Analysis
5.1 Amount
- With a Yearly Dividend Yield of 3.95%, OTEX has a reasonable but not impressive dividend return.
- In the last 3 months the price of OTEX has falen by -25.24%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
- OTEX's Dividend Yield is rather good when compared to the industry average which is at 0.57. OTEX pays more dividend than 96.38% of the companies 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
- 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 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.
- OTEX's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP62.08%
EPS Next 2Y9.09%
EPS Next 3Y8.33%
OTEX Fundamentals: All Metrics, Ratios and Statistics
25.06
+0.31 (+1.25%)
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 Change12.27%
Ins Owners1.48%
Ins Owner ChangeN/A
Market Cap6.28B
Revenue(TTM)5.18B
Net Income(TTM)436.35M
Analysts78
Price Target40.19 (60.38%)
Short Float %4.71%
Short Ratio6.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.95% |
Yearly Dividend1.04
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)1.2%
PT rev (3m)-10.27%
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 | 5.5 | ||
| P/S | 1.21 | ||
| P/FCF | 7.15 | ||
| P/OCF | 6.12 | ||
| P/B | 1.55 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.59 |
EPS(TTM)3.97
EY15.84%
EPS(NY)4.56
Fwd EY18.19%
FCF(TTM)3.51
FCFY13.99%
OCF(TTM)4.1
OCFY16.35%
SpS20.67
BVpS16.14
TBVpS-20.43
PEG (NY)0.63
PEG (5Y)1.09
Graham Number37.96
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 | 1.22 |
F-Score6
WACC9.55%
ROIC/WACC0.79
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 FAQ
What is the ChartMill fundamental rating of OPEN TEXT CORP (OTEX) stock?
ChartMill assigns a fundamental rating of 5 / 10 to OTEX.
What is the valuation status of OPEN TEXT CORP (OTEX) stock?
ChartMill assigns a valuation rating of 9 / 10 to OPEN TEXT CORP (OTEX). This can be considered as Undervalued.
Can you provide the profitability details for OPEN TEXT CORP?
OPEN TEXT CORP (OTEX) has a profitability rating of 7 / 10.
What are the PE and PB ratios of OPEN TEXT CORP (OTEX) stock?
The Price/Earnings (PE) ratio for OPEN TEXT CORP (OTEX) 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) is 7 / 10 and the dividend payout ratio is 62.08%.