OPEN TEXT CORP (OTEX) Stock Fundamental Analysis
NASDAQ:OTEX • CA6837151068
24.45 USD
-0.26 (-1.05%)
Last: Feb 19, 2026, 12:45 PM
We assign a fundamental rating of 5 out of 10 to OTEX. 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 scores decently on growth, while it is valued quite cheap. This could make an interesting combination. OTEX also has an excellent dividend rating.
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.
- In the past 5 years OTEX has always 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 65.58% of the companies in the same industry.
- With a decent Return On Equity value of 10.79%, OTEX is doing good in the industry, outperforming 73.91% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 7.50%, OTEX is in the better half of the industry, outperforming 77.17% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for OTEX is below the industry average of 10.64%.
- 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 67.03% of its industry peers.
- OTEX's Profit Margin has improved in the last couple of years.
- OTEX's Operating Margin of 20.78% is amongst the best of the industry. OTEX outperforms 86.23% 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 72.70%. This is comparable to the rest of the industry: OTEX outperforms 57.61% of 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. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so 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.
- The debt/assets ratio for OTEX is higher compared to a year ago.
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.
- OTEX has a Altman-Z score of 1.22. This is comparable to the rest of the industry: OTEX outperforms 42.75% of its industry peers.
- The Debt to FCF ratio of OTEX is 7.25, which is on the high side as it means it would take OTEX, 7.25 years of fcf income to pay off all of its debts.
- With a Debt to FCF ratio value of 7.25, OTEX perfoms like the industry average, outperforming 51.09% of the companies in the same industry.
- OTEX has a Debt/Equity ratio of 1.57. This is a high value indicating a heavy dependency on external financing.
- OTEX's Debt to Equity ratio of 1.57 is on the low side compared to the rest of the industry. OTEX is outperformed by 81.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.57 | ||
| Debt/FCF | 7.25 | ||
| Altman-Z | 1.22 |
ROIC/WACC0.79
WACC9.54%
2.3 Liquidity
- A Current Ratio of 0.94 indicates that OTEX may have some problems paying its short term obligations.
- OTEX has a worse Current ratio (0.94) than 77.54% of its industry peers.
- OTEX has a Quick 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's Quick ratio of 0.94 is on the low side compared to the rest of the industry. OTEX is outperformed by 77.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
- OTEX shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.25%.
- Measured over the past 5 years, OTEX shows a small growth in Earnings Per Share. The EPS has been growing by 5.79% on average per year.
- 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 Year1.28%
Revenue Next 2Y1.54%
Revenue Next 3Y1.48%
Revenue Next 5Y4.54%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- 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
- OTEX is valuated cheaply with a Price/Earnings ratio of 6.16.
- OTEX's Price/Earnings ratio is rather cheap when compared to the industry. OTEX is cheaper than 94.20% of the companies in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 27.27, OTEX is valued rather cheaply.
- The Price/Forward Earnings ratio is 5.36, which indicates a rather cheap valuation of OTEX.
- OTEX's Price/Forward Earnings ratio is rather cheap when compared to the industry. OTEX is cheaper than 93.84% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 28.16. OTEX is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.16 | ||
| Fwd PE | 5.36 |
4.2 Price Multiples
- OTEX's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. OTEX is cheaper than 92.03% 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 94.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.97 | ||
| EV/EBITDA | 6.59 |
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)0.62
PEG (5Y)1.06
EPS Next 2Y9.09%
EPS Next 3Y8.33%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 4.19%, OTEX is a good candidate for dividend investing.
- The stock price of OTEX dropped by -25.32% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
- Compared to an average industry Dividend Yield of 0.60, OTEX pays a better dividend. On top of this OTEX pays more dividend than 96.38% of the companies listed in the same industry.
- OTEX's Dividend Yield is rather good when compared to the S&P500 average which is at 1.85.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.19% |
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 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.
- The dividend of OTEX is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP62.08%
EPS Next 2Y9.09%
EPS Next 3Y8.33%
NASDAQ:OTEX (2/19/2026, 12:45:09 PM)
24.45
-0.26 (-1.05%)
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 Change13.15%
Ins Owners1.48%
Ins Owner ChangeN/A
Market Cap6.13B
Revenue(TTM)5.18B
Net Income(TTM)436.35M
Analysts78
Price Target40.28 (64.74%)
Short Float %3.76%
Short Ratio5.4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.19% |
Yearly Dividend1.04
Dividend Growth(5Y)8.34%
DP62.08%
Div Incr Years11
Div Non Decr Years11
Ex-DateN/A
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)0.95%
PT rev (3m)-10.05%
EPS NQ rev (1m)-5.88%
EPS NQ rev (3m)-6.29%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)0.21%
Revenue NQ rev (1m)-1.22%
Revenue NQ rev (3m)-1.37%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.16 | ||
| Fwd PE | 5.36 | ||
| P/S | 1.18 | ||
| P/FCF | 6.97 | ||
| P/OCF | 5.97 | ||
| P/B | 1.52 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.59 |
EPS(TTM)3.97
EY16.24%
EPS(NY)4.56
Fwd EY18.64%
FCF(TTM)3.51
FCFY14.34%
OCF(TTM)4.1
OCFY16.76%
SpS20.67
BVpS16.14
TBVpS-20.43
PEG (NY)0.62
PEG (5Y)1.06
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
WACC9.54%
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 Year1.28%
Revenue Next 2Y1.54%
Revenue Next 3Y1.48%
Revenue Next 5Y4.54%
EBIT growth 1Y2.28%
EBIT growth 3Y14.51%
EBIT growth 5Y11.45%
EBIT Next Year14.34%
EBIT Next 3Y7.75%
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 6.16 and the Price/Book (PB) ratio is 1.52.
Is the dividend of OPEN TEXT CORP sustainable?
The dividend rating of OPEN TEXT CORP (OTEX) is 8 / 10 and the dividend payout ratio is 62.08%.