33.31 USD
-0.34 (-1.01%)
33.31 USD
0 (0%)
OTEX gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 280 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 Finally 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.
OTEX had positive earnings in each of the past 5 years.
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 3.70%, OTEX is doing good in the industry, outperforming 69.29% of the companies in the same industry.
OTEX has a Return On Equity of 12.61%. This is in the better half of the industry: OTEX outperforms 77.14% of its industry peers.
Looking at the Return On Invested Capital, with a value of 7.53%, OTEX is in the better half of the industry, outperforming 76.79% 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 10.98%.
The last Return On Invested Capital (7.53%) for OTEX is above the 3 year average (6.00%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.7% | ||
| ROE | 12.61% | ||
| ROIC | 7.53% |
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 9.60%, OTEX is in the better half of the industry, outperforming 71.07% of the companies in the same industry.
OTEX's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 20.73%, OTEX belongs to the best of the industry, outperforming 86.43% 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 72.51%, OTEX is in line with its industry, outperforming 58.57% 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 | 20.73% | ||
| PM (TTM) | 9.6% | ||
| GM | 72.51% |
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.
OTEX has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, OTEX has a worse debt to assets ratio.
2.2 Solvency
OTEX has an Altman-Z score of 1.35. 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 1.35. This is comparable to the rest of the industry: OTEX outperforms 41.07% of its industry peers.
OTEX has a debt to FCF ratio of 7.04. This is a slightly negative value and a sign of low solvency as OTEX would need 7.04 years to pay back of all of its debts.
OTEX's Debt to FCF ratio of 7.04 is in line compared to the rest of the industry. OTEX outperforms 53.21% of its industry peers.
A Debt/Equity ratio of 1.60 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 1.60, OTEX is doing worse than 80.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.6 | ||
| Debt/FCF | 7.04 | ||
| Altman-Z | 1.35 |
ROIC/WACC0.77
WACC9.72%
2.3 Liquidity
OTEX has a Current Ratio of 0.87. 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 0.87. This is amonst the worse of the industry: OTEX underperforms 81.43% of its industry peers.
A Quick Ratio of 0.87 indicates that OTEX may have some problems paying its short term obligations.
OTEX has a Quick ratio of 0.87. This is amonst the worse of the industry: OTEX underperforms 81.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.87 |
3. Growth
3.1 Past
The earnings per share for OTEX have decreased by -3.42% 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.
Looking at the last year, OTEX shows a decrease in Revenue. The Revenue has decreased by -7.58% 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)-3.42%
EPS 3Y5.95%
EPS 5Y5.79%
EPS Q2Q%12.9%
Revenue 1Y (TTM)-7.58%
Revenue growth 3Y13.94%
Revenue growth 5Y10.69%
Sales Q2Q%1.51%
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 8.33% on average per year.
The Revenue is expected to grow by 4.54% on average over the next years.
EPS Next Y10.03%
EPS Next 2Y9.09%
EPS Next 3Y8.33%
EPS Next 5YN/A
Revenue Next Year1.18%
Revenue Next 2Y1.47%
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
A Price/Earnings ratio of 8.43 indicates a reasonable 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 90.36% of the companies listed in the same industry.
OTEX is valuated cheaply when we compare the Price/Earnings ratio to 26.28, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 7.31, the valuation of OTEX can be described as very cheap.
Compared to the rest of the industry, the Price/Forward Earnings ratio of OTEX indicates a rather cheap valuation: OTEX is cheaper than 92.50% of the companies listed in the same industry.
OTEX is valuated cheaply when we compare the Price/Forward Earnings ratio to 23.52, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.43 | ||
| Fwd PE | 7.31 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, OTEX is valued cheaply inside the industry as 92.14% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, OTEX is valued cheaply inside the industry as 94.29% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.27 | ||
| EV/EBITDA | 8.03 |
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)1.46
EPS Next 2Y9.09%
EPS Next 3Y8.33%
5. Dividend
5.1 Amount
OTEX has a Yearly Dividend Yield of 2.87%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 60.83, OTEX pays a better dividend. On top of this OTEX pays more dividend than 96.07% of the companies listed in the same industry.
OTEX's Dividend Yield is a higher than the S&P500 average which is at 2.31.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.87% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)8.34%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
OTEX pays out 54.34% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of OTEX is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP54.34%
EPS Next 2Y9.09%
EPS Next 3Y8.33%
33.31
-0.34 (-1.01%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners80.71%
Inst Owner Change6.33%
Ins Owners2.08%
Ins Owner ChangeN/A
Market Cap8.39B
Revenue(TTM)5.19B
Net Income(TTM)498.12M
Analysts78
Price Target39.46 (18.46%)
Short Float %3.83%
Short Ratio8.98
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.87% |
Yearly Dividend1.04
Dividend Growth(5Y)8.34%
DP54.34%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)9.93%
Min EPS beat(2)4.13%
Max EPS beat(2)15.74%
EPS beat(4)4
Avg EPS beat(4)11.61%
Min EPS beat(4)4.13%
Max EPS beat(4)17.92%
EPS beat(8)6
Avg EPS beat(8)6.82%
EPS beat(12)10
Avg EPS beat(12)10.63%
EPS beat(16)12
Avg EPS beat(16)8.08%
Revenue beat(2)0
Avg Revenue beat(2)-0.66%
Min Revenue beat(2)-0.91%
Max Revenue beat(2)-0.42%
Revenue beat(4)0
Avg Revenue beat(4)-1.5%
Min Revenue beat(4)-4.03%
Max Revenue beat(4)-0.42%
Revenue beat(8)1
Avg Revenue beat(8)-1.88%
Revenue beat(12)3
Avg Revenue beat(12)-1.07%
Revenue beat(16)3
Avg Revenue beat(16)-1.18%
PT rev (1m)-12.44%
PT rev (3m)-2.56%
EPS NQ rev (1m)-4.66%
EPS NQ rev (3m)-4.81%
EPS NY rev (1m)0.24%
EPS NY rev (3m)-0.17%
Revenue NQ rev (1m)-3.67%
Revenue NQ rev (3m)-3.6%
Revenue NY rev (1m)-0.43%
Revenue NY rev (3m)-0.58%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.43 | ||
| Fwd PE | 7.31 | ||
| P/S | 1.62 | ||
| P/FCF | 9.27 | ||
| P/OCF | 7.95 | ||
| P/B | 2.12 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.03 |
EPS(TTM)3.95
EY11.86%
EPS(NY)4.56
Fwd EY13.68%
FCF(TTM)3.59
FCFY10.79%
OCF(TTM)4.19
OCFY12.58%
SpS20.58
BVpS15.68
TBVpS-21.2
PEG (NY)0.84
PEG (5Y)1.46
Graham Number37.33
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.7% | ||
| ROE | 12.61% | ||
| ROCE | 9.76% | ||
| ROIC | 7.53% | ||
| ROICexc | 8.36% | ||
| ROICexgc | 131.42% | ||
| OM | 20.73% | ||
| PM (TTM) | 9.6% | ||
| GM | 72.51% | ||
| FCFM | 17.46% |
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 | 1.6 | ||
| Debt/FCF | 7.04 | ||
| Debt/EBITDA | 3.7 | ||
| Cap/Depr | 23.51% | ||
| Cap/Sales | 2.9% | ||
| Interest Coverage | 3.06 | ||
| Cash Conversion | 61.57% | ||
| Profit Quality | 181.84% | ||
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.87 | ||
| Altman-Z | 1.35 |
F-Score6
WACC9.72%
ROIC/WACC0.77
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)-3.42%
EPS 3Y5.95%
EPS 5Y5.79%
EPS Q2Q%12.9%
EPS Next Y10.03%
EPS Next 2Y9.09%
EPS Next 3Y8.33%
EPS Next 5YN/A
Revenue 1Y (TTM)-7.58%
Revenue growth 3Y13.94%
Revenue growth 5Y10.69%
Sales Q2Q%1.51%
Revenue Next Year1.18%
Revenue Next 2Y1.47%
Revenue Next 3Y1.48%
Revenue Next 5Y4.54%
EBIT growth 1Y2.5%
EBIT growth 3Y14.51%
EBIT growth 5Y11.45%
EBIT Next Year14.34%
EBIT Next 3Y7.75%
EBIT Next 5YN/A
FCF growth 1Y59.09%
FCF growth 3Y-8.21%
FCF growth 5Y-4.86%
OCF growth 1Y52.11%
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.
Can you provide the valuation status for OPEN TEXT CORP?
ChartMill assigns a valuation rating of 8 / 10 to OPEN TEXT CORP (OTEX). This can be considered as Undervalued.
What is the profitability of OTEX stock?
OPEN TEXT CORP (OTEX) has a profitability rating of 7 / 10.
What is the expected EPS growth for OPEN TEXT CORP (OTEX) stock?
The Earnings per Share (EPS) of OPEN TEXT CORP (OTEX) is expected to grow by 10.03% in the next year.
Is the dividend of OPEN TEXT CORP sustainable?
The dividend rating of OPEN TEXT CORP (OTEX) is 7 / 10 and the dividend payout ratio is 54.34%.