OPEN TEXT CORP (OTEX) Fundamental Analysis & Valuation
NASDAQ:OTEX • CA6837151068
Current stock price
22.52 USD
-0.02 (-0.09%)
At close:
22.52 USD
0 (0%)
After Hours:
This OTEX fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
1. OTEX Profitability Analysis
1.1 Basic Checks
- OTEX had positive earnings in the past year.
- In the past year OTEX had a positive cash flow from operations.
- OTEX had positive earnings in each of the past 5 years.
- OTEX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- Looking at the Return On Assets, with a value of 3.22%, OTEX is in the better half of the industry, outperforming 68.73% 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 77.09% of the companies in the same industry.
- The Return On Invested Capital of OTEX (7.50%) is better than 78.55% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for OTEX is below the industry average of 10.99%.
- 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's Profit Margin of 8.42% is fine compared to the rest of the industry. OTEX outperforms 70.55% of its industry peers.
- OTEX's Profit Margin has improved in the last couple of years.
- With an excellent Operating Margin value of 20.78%, OTEX belongs to the best of the industry, outperforming 88.73% of the companies in the same industry.
- OTEX's Operating Margin has been stable in the last couple of years.
- Looking at the Gross Margin, with a value of 72.70%, OTEX is in line with its industry, outperforming 59.27% 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 | 20.78% | ||
| 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
- 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 1.19. 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 1.19. This is comparable to the rest of the industry: OTEX outperforms 44.36% of its industry peers.
- 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 (7.25) which is in line with 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 in the lower half of the industry: OTEX underperforms 79.27% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.57 | ||
| Debt/FCF | 7.25 | ||
| Altman-Z | 1.19 |
ROIC/WACC0.81
WACC9.24%
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.
- OTEX has a worse Current ratio (0.94) than 77.82% 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.
- With a Quick ratio value of 0.94, OTEX is not doing good in the industry: 77.45% of the companies in the same industry are doing better.
| 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%.
- 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.
- The Revenue has been growing by 10.69% on average over the past years. This is quite good.
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
- Based on estimates for the next years, OTEX will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.35% on average per year.
- 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 Y10.07%
EPS Next 2Y7.69%
EPS Next 3Y15.35%
EPS Next 5YN/A
Revenue Next Year1.33%
Revenue Next 2Y1.18%
Revenue Next 3Y1.13%
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.
- 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
- OTEX is valuated cheaply with a Price/Earnings ratio of 5.67.
- Based on the Price/Earnings ratio, OTEX is valued cheaply inside the industry as 94.55% 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 26.17.
- The Price/Forward Earnings ratio is 5.07, which indicates a rather cheap valuation of OTEX.
- Based on the Price/Forward Earnings ratio, OTEX is valued cheaply inside the industry as 92.36% of the companies are valued more expensively.
- The average S&P500 Price/Forward Earnings ratio is at 23.05. OTEX is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.67 | ||
| Fwd PE | 5.07 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, OTEX is valued cheaply inside the industry as 93.82% of the companies are valued more expensively.
- Based on the Price/Free Cash Flow ratio, OTEX is valued cheaper than 93.82% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.42 | ||
| EV/EBITDA | 6.27 |
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.
- A more expensive valuation may be justified as OTEX's earnings are expected to grow with 15.35% in the coming years.
PEG (NY)0.56
PEG (5Y)0.98
EPS Next 2Y7.69%
EPS Next 3Y15.35%
5. OTEX Dividend Analysis
5.1 Amount
- With a Yearly Dividend Yield of 4.52%, OTEX is a good candidate for dividend investing.
- In the last 3 months the price of OTEX has falen by -29.05%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
- Compared to an average industry Dividend Yield of 0.67, OTEX pays a better dividend. On top of this OTEX pays more dividend than 96.36% 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 1.89.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.52% |
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 Years12
Div Non Decr Years12
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 earnings are growing more, so the dividend growth is sustainable.
DP62.08%
EPS Next 2Y7.69%
EPS Next 3Y15.35%
OTEX Fundamentals: All Metrics, Ratios and Statistics
22.52
-0.02 (-0.09%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)02-05 2026-02-05/amc
Earnings (Next)04-30 2026-04-30/amc
Inst Owners91.16%
Inst Owner Change0.01%
Ins Owners1.49%
Ins Owner ChangeN/A
Market Cap5.64B
Revenue(TTM)5.18B
Net Income(TTM)436.35M
Analysts78
Price Target40.19 (78.46%)
Short Float %6.4%
Short Ratio6.66
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.52% |
Yearly Dividend1.04
Dividend Growth(5Y)8.34%
DP62.08%
Div Incr Years12
Div Non Decr Years12
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)0%
PT rev (3m)0.71%
EPS NQ rev (1m)0.03%
EPS NQ rev (3m)-5.86%
EPS NY rev (1m)0%
EPS NY rev (3m)0.04%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.22%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.67 | ||
| Fwd PE | 5.07 | ||
| P/S | 1.09 | ||
| P/FCF | 6.42 | ||
| P/OCF | 5.5 | ||
| P/B | 1.4 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.27 |
EPS(TTM)3.97
EY17.63%
EPS(NY)4.44
Fwd EY19.72%
FCF(TTM)3.51
FCFY15.57%
OCF(TTM)4.1
OCFY18.2%
SpS20.67
BVpS16.14
TBVpS-20.43
PEG (NY)0.56
PEG (5Y)0.98
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 | 1.19 |
F-Score6
WACC9.24%
ROIC/WACC0.81
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 Y10.07%
EPS Next 2Y7.69%
EPS Next 3Y15.35%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.3%
Revenue growth 3Y13.94%
Revenue growth 5Y10.69%
Sales Q2Q%-0.58%
Revenue Next Year1.33%
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 Fundamental Analysis 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.
How profitable is OPEN TEXT CORP (OTEX) stock?
OPEN TEXT CORP (OTEX) has a profitability rating of 7 / 10.
Can you provide the financial health for OTEX stock?
The financial health rating of OPEN TEXT CORP (OTEX) is 2 / 10.
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%.