OPEN TEXT CORP (OTEX) Stock Fundamental Analysis
NASDAQ:OTEX - CA6837151068 - Common Stock
33.02 USD
-0.45 (-1.34%)
Taking everything into account, OTEX scores 5 out of 10 in our fundamental rating. OTEX was compared to 280 industry peers in the Software industry. While OTEX belongs to the best of the industry regarding profitability, there are concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on OTEX.
1. Profitability
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
With a decent Return On Assets value of 3.16%, OTEX is doing good in the industry, outperforming 68.57% of the companies in the same industry.
OTEX has a Return On Equity of 11.09%. This is in the better half of the industry: OTEX outperforms 77.86% of its industry peers.
With a decent Return On Invested Capital value of 7.26%, OTEX is doing good in the industry, outperforming 77.14% 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 12.00%.
The 3 year average ROIC (6.00%) for OTEX is below the current ROIC(7.26%), indicating increased profibility in the last year.
| 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
Looking at the Profit Margin, with a value of 8.43%, OTEX is in the better half of the industry, outperforming 71.79% of the companies in the same industry.
In the last couple of years the Profit Margin of OTEX has grown nicely.
OTEX's Operating Margin of 20.09% is amongst the best of the industry. OTEX outperforms 86.07% of its industry peers.
OTEX's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 72.25%, OTEX is in line with its industry, outperforming 58.93% of the companies in the same industry.
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 | 20.09% | ||
| 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
OTEX has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for OTEX has been reduced compared to 1 year ago.
OTEX has less shares outstanding than it did 5 years ago.
The debt/assets ratio for OTEX is higher compared to a year ago.
2.2 Solvency
OTEX has an Altman-Z score of 1.29. This is a bad value and indicates that OTEX is not financially healthy and even has some risk of bankruptcy.
OTEX has a worse Altman-Z score (1.29) than 60.71% 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.
Looking at the Debt to FCF ratio, with a value of 9.28, OTEX is in line with its industry, outperforming 51.43% of the companies in the same industry.
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 79.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.61 | ||
| Debt/FCF | 9.28 | ||
| Altman-Z | 1.29 |
ROIC/WACC0.71
WACC10.16%
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 80.00% of its industry peers.
A Quick Ratio of 0.80 indicates that OTEX may have some problems paying its short term obligations.
OTEX has a Quick ratio of 0.80. This is amonst the worse of the industry: OTEX underperforms 80.00% 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%.
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 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
The Earnings Per Share is expected to grow by 7.42% on average over the next years.
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 Y10.21%
EPS Next 2Y9.19%
EPS Next 3Y7.42%
EPS Next 5YN/A
Revenue Next Year1.77%
Revenue Next 2Y1.67%
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
The Price/Earnings ratio is 8.62, which indicates a very decent valuation of OTEX.
Based on the Price/Earnings ratio, OTEX is valued cheaper than 91.43% of the companies in the same industry.
OTEX's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.03.
Based on the Price/Forward Earnings ratio of 7.82, the valuation of OTEX can be described as very cheap.
93.57% 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 22.63, OTEX is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.62 | ||
| Fwd PE | 7.82 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, OTEX is valued cheaper than 91.43% of the companies in the same industry.
93.21% of the companies in the same industry are more expensive than OTEX, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.22 | ||
| EV/EBITDA | 8.18 |
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)0.84
PEG (5Y)1.49
EPS Next 2Y9.19%
EPS Next 3Y7.42%
5. Dividend
5.1 Amount
OTEX has a Yearly Dividend Yield of 2.98%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 59.44, OTEX pays a better dividend. On top of this OTEX pays more dividend than 97.50% of the companies listed in the same industry.
OTEX's Dividend Yield is a higher than the S&P500 average which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.98% |
5.2 History
On average, the dividend of OTEX grows each year by 9.59%, which is quite nice.
OTEX has paid a dividend for at least 10 years, which is a reliable track record.
OTEX has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)9.59%
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 2Y9.19%
EPS Next 3Y7.42%
NASDAQ:OTEX (9/5/2025, 1:52:24 PM)
33.02
-0.45 (-1.34%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners80.68%
Inst Owner Change-1.58%
Ins Owners2.13%
Ins Owner ChangeN/A
Market Cap8.40B
Analysts76
Price Target40.5 (22.65%)
Short Float %3.82%
Short Ratio7.19
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.98% |
Yearly Dividend0.99
Dividend Growth(5Y)9.59%
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)-1.12%
PT rev (3m)-5.71%
EPS NQ rev (1m)9.26%
EPS NQ rev (3m)5.73%
EPS NY rev (1m)1.51%
EPS NY rev (3m)1.51%
Revenue NQ rev (1m)2.04%
Revenue NQ rev (3m)-2.47%
Revenue NY rev (1m)0.89%
Revenue NY rev (3m)0.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.62 | ||
| Fwd PE | 7.82 | ||
| P/S | 1.62 | ||
| P/FCF | 12.22 | ||
| P/OCF | 10.11 | ||
| P/B | 2.14 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.18 |
EPS(TTM)3.83
EY11.6%
EPS(NY)4.22
Fwd EY12.78%
FCF(TTM)2.7
FCFY8.19%
OCF(TTM)3.27
OCFY9.89%
SpS20.32
BVpS15.45
TBVpS-21.88
PEG (NY)0.84
PEG (5Y)1.49
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 | 1.29 |
F-Score4
WACC10.16%
ROIC/WACC0.71
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 Y10.21%
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 Year1.77%
Revenue Next 2Y1.67%
Revenue Next 3Y1.56%
Revenue Next 5Y4.54%
EBIT growth 1Y1.58%
EBIT growth 3Y14.51%
EBIT growth 5Y11.45%
EBIT Next Year15.31%
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%