OPEN TEXT CORP (OTEX) Stock Fundamental Analysis
USA - NASDAQ:OTEX - CA6837151068 - Common Stock
39.03 USD
+0.23 (+0.59%)
39.03 USD
0 (0%)
OTEX gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 283 industry peers in the Software industry. OTEX has an excellent profitability rating, but 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
OTEX has a better Return On Assets (3.16%) than 67.61% of its industry peers.
OTEX has a Return On Equity of 11.09%. This is in the better half of the industry: OTEX outperforms 78.52% of its industry peers.
The Return On Invested Capital of OTEX (7.26%) is better than 76.41% of its industry peers.
The Average Return On Invested Capital over the past 3 years for OTEX is significantly below the industry average of 11.88%.
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 has a better Profit Margin (8.43%) than 70.77% of its industry peers.
OTEX's Profit Margin has improved in the last couple of years.
OTEX has a Operating Margin of 20.09%. This is amongst the best in the industry. OTEX outperforms 86.27% of its industry peers.
In the last couple of years the Operating Margin of OTEX has remained more or less at the same level.
Looking at the Gross Margin, with a value of 72.25%, OTEX is in line with its industry, outperforming 59.15% of the companies in the same industry.
OTEX's Gross Margin has been stable in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), OTEX 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.
OTEX has a worse debt/assets ratio than last year.
2.2 Solvency
OTEX has an Altman-Z score of 1.38. 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 1.38. This is in the lower half of the industry: OTEX underperforms 60.56% of its industry peers.
OTEX has a debt to FCF ratio of 9.28. This is a negative value and a sign of low solvency as OTEX would need 9.28 years to pay back of 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 51.76% of the companies in the same industry.
OTEX has a Debt/Equity ratio of 1.61. This is a high value indicating a heavy dependency on external financing.
OTEX has a Debt to Equity ratio of 1.61. This is in the lower half of the industry: OTEX underperforms 79.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.61 | ||
| Debt/FCF | 9.28 | ||
| Altman-Z | 1.38 |
ROIC/WACC0.7
WACC10.31%
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 80.63% 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 80.28% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.8 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
The earnings per share for OTEX have decreased by -8.15% in the last year.
OTEX shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.79% yearly.
OTEX shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -10.42%.
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
OTEX is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.42% yearly.
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 Year1.66%
Revenue Next 2Y1.69%
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 10.19, which indicates a very decent valuation of OTEX.
Compared to the rest of the industry, the Price/Earnings ratio of OTEX indicates a rather cheap valuation: OTEX is cheaper than 90.49% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.40. OTEX is valued rather cheaply when compared to this.
OTEX is valuated reasonably with a Price/Forward Earnings ratio of 9.27.
Based on the Price/Forward Earnings ratio, OTEX is valued cheaper than 91.55% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of OTEX to the average of the S&P500 Index (22.94), we can say OTEX is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.19 | ||
| Fwd PE | 9.27 |
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 91.90% 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 88.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.44 | ||
| EV/EBITDA | 9.02 |
4.3 Compensation for Growth
OTEX's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
OTEX has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.02
PEG (5Y)1.76
EPS Next 2Y9.19%
EPS Next 3Y7.42%
5. Dividend
5.1 Amount
OTEX has a Yearly Dividend Yield of 2.48%. Purely for dividend investing, there may be better candidates out there.
OTEX's Dividend Yield is rather good when compared to the industry average which is at 30.43. OTEX pays more dividend than 96.13% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, OTEX has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.48% |
5.2 History
The dividend of OTEX is nicely growing with an annual growth rate of 8.34%!
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
62.29% of the earnings are spent on dividend by OTEX. 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%
39.03
+0.23 (+0.59%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners80.71%
Inst Owner Change-0.24%
Ins Owners2.08%
Ins Owner ChangeN/A
Market Cap9.93B
Analysts78
Price Target45.08 (15.5%)
Short Float %5.2%
Short Ratio8.15
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.48% |
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)10.99%
PT rev (3m)10.07%
EPS NQ rev (1m)0.24%
EPS NQ rev (3m)9.52%
EPS NY rev (1m)-0.2%
EPS NY rev (3m)1.31%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)1.96%
Revenue NY rev (1m)-0.11%
Revenue NY rev (3m)0.78%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.19 | ||
| Fwd PE | 9.27 | ||
| P/S | 1.92 | ||
| P/FCF | 14.44 | ||
| P/OCF | 11.95 | ||
| P/B | 2.53 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.02 |
EPS(TTM)3.83
EY9.81%
EPS(NY)4.21
Fwd EY10.79%
FCF(TTM)2.7
FCFY6.93%
OCF(TTM)3.27
OCFY8.37%
SpS20.32
BVpS15.45
TBVpS-21.88
PEG (NY)1.02
PEG (5Y)1.76
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 | 1.38 |
F-Score4
WACC10.31%
ROIC/WACC0.7
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 Year1.66%
Revenue Next 2Y1.69%
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%