OPEN TEXT CORP (OTEX) Stock Fundamental Analysis
USA - NASDAQ:OTEX - CA6837151068 - Common Stock
37.39 USD
-0.34 (-0.9%)
Overall OTEX gets a fundamental rating of 5 out of 10. We evaluated OTEX against 281 industry peers in the Software industry. OTEX scores excellent on profitability, but there are concerns on its financial health. OTEX may be a bit undervalued, certainly considering the very reasonable score on growth
1. Profitability
1.1 Basic Checks
OTEX had positive earnings in the past year.
In the past year OTEX had a positive cash flow from operations.
Each year in the past 5 years OTEX has been profitable.
In the past 5 years OTEX always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 3.16%, OTEX is doing good in the industry, outperforming 67.62% of the companies in the same industry.
OTEX's Return On Equity of 11.09% is fine compared to the rest of the industry. OTEX outperforms 78.29% of its industry peers.
OTEX has a better Return On Invested Capital (7.26%) than 76.51% of its industry peers.
OTEX had an Average Return On Invested Capital over the past 3 years of 6.00%. This is significantly below the industry average of 11.95%.
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
OTEX's Profit Margin of 8.43% is fine compared to the rest of the industry. OTEX outperforms 71.53% of its industry peers.
OTEX's Profit Margin has improved in the last couple of years.
OTEX has a better Operating Margin (20.09%) than 86.48% 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 (72.25%) which is comparable to the rest of the 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
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 1.36. 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 (1.36) than 60.50% 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's Debt to FCF ratio of 9.28 is in line compared to the rest of the industry. OTEX outperforms 51.25% of its industry peers.
OTEX has a Debt/Equity ratio of 1.61. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.61, OTEX is not doing good in the industry: 79.00% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.61 | ||
| Debt/FCF | 9.28 | ||
| Altman-Z | 1.36 |
ROIC/WACC0.71
WACC10.3%
2.3 Liquidity
OTEX has a Current Ratio of 0.80. 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 of 0.80. This is amonst the worse of the industry: OTEX underperforms 80.07% of its industry peers.
OTEX has a Quick Ratio of 0.80. 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's Quick ratio of 0.80 is on the low side compared to the rest of the industry. OTEX is outperformed by 80.07% 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.
The Revenue for OTEX has decreased by -10.42% in the past year. This is quite bad
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)-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
Based on estimates for the next years, OTEX will show a small growth in Earnings Per Share. The EPS will grow by 7.42% on average per year.
OTEX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.54% yearly.
EPS Next Y9.99%
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
With a Price/Earnings ratio of 9.76, the valuation of OTEX can be described as very reasonable.
Based on the Price/Earnings ratio, OTEX is valued cheaply inside the industry as 90.04% of the companies are valued more expensively.
OTEX's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.67.
The Price/Forward Earnings ratio is 8.88, which indicates a very decent valuation of OTEX.
92.88% of the companies in the same industry are more expensive than OTEX, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of OTEX to the average of the S&P500 Index (23.13), we can say OTEX is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.76 | ||
| Fwd PE | 8.88 |
4.2 Price Multiples
OTEX's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. OTEX is cheaper than 91.46% of the companies in the same industry.
OTEX's Price/Free Cash Flow ratio is rather cheap when compared to the industry. OTEX is cheaper than 90.39% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.83 | ||
| EV/EBITDA | 8.82 |
4.3 Compensation for Growth
The 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)0.98
PEG (5Y)1.68
EPS Next 2Y9.19%
EPS Next 3Y7.42%
5. Dividend
5.1 Amount
OTEX has a Yearly Dividend Yield of 2.55%.
OTEX's Dividend Yield is rather good when compared to the industry average which is at 39.95. OTEX pays more dividend than 96.80% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, OTEX has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.55% |
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
62.29% of the earnings are spent on dividend by OTEX. This is not a sustainable payout ratio.
OTEX's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP62.29%
EPS Next 2Y9.19%
EPS Next 3Y7.42%
NASDAQ:OTEX (9/30/2025, 10:50:04 AM)
37.39
-0.34 (-0.9%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners80.71%
Inst Owner Change-1.58%
Ins Owners2.08%
Ins Owner ChangeN/A
Market Cap9.51B
Analysts76
Price Target40.61 (8.61%)
Short Float %5.2%
Short Ratio8.15
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.55% |
Yearly Dividend1.04
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)0.29%
PT rev (3m)-0.87%
EPS NQ rev (1m)0%
EPS NQ rev (3m)5.73%
EPS NY rev (1m)-0.2%
EPS NY rev (3m)1.31%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.47%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.76 | ||
| Fwd PE | 8.88 | ||
| P/S | 1.84 | ||
| P/FCF | 13.83 | ||
| P/OCF | 11.45 | ||
| P/B | 2.42 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.82 |
EPS(TTM)3.83
EY10.24%
EPS(NY)4.21
Fwd EY11.27%
FCF(TTM)2.7
FCFY7.23%
OCF(TTM)3.27
OCFY8.74%
SpS20.32
BVpS15.45
TBVpS-21.88
PEG (NY)0.98
PEG (5Y)1.68
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 | 1.36 |
F-Score4
WACC10.3%
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 Y9.99%
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 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%