25.53 USD
-0.85 (-3.22%)
At close: Jan 30, 2026
25.75 USD
+0.22 (+0.86%)
After Hours: 1/30/2026, 8:11:58 PM
We assign a fundamental rating of 5 out of 10 to OTEX. OTEX was compared to 278 industry peers in the Software industry. While OTEX belongs to the best of the industry regarding profitability, there are concerns on its financial health. OTEX is valued quite cheap, while showing a decent growth score. This is a good combination! Finally OTEX also has an excellent dividend rating.
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.
- In the past 5 years OTEX always reported a positive cash flow from operatings.
1.2 Ratios
- The Return On Assets of OTEX (3.70%) is better than 68.70% of its industry peers.
- Looking at the Return On Equity, with a value of 12.61%, OTEX is in the better half of the industry, outperforming 75.90% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 7.53%, OTEX is in the better half of the industry, outperforming 77.34% of the companies in the same industry.
- OTEX had an Average Return On Invested Capital over the past 3 years of 6.00%. This is below the industry average of 10.73%.
- 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
- OTEX's Profit Margin of 9.60% is fine compared to the rest of the industry. OTEX outperforms 69.78% of its industry peers.
- OTEX's Profit Margin has improved in the last couple of years.
- OTEX has a Operating Margin of 20.73%. This is amongst the best in the industry. OTEX outperforms 86.33% of its industry peers.
- 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 57.91% 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 | 20.73% | ||
| 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
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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 1.24. 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 (1.24) which is in line with 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.
- Looking at the Debt to FCF ratio, with a value of 7.04, OTEX is in line with its industry, outperforming 51.44% of the companies in the same industry.
- OTEX has a Debt/Equity ratio of 1.60. This is a high value indicating a heavy dependency on external financing.
- Looking at the Debt to Equity ratio, with a value of 1.60, OTEX is doing worse than 80.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.6 | ||
| Debt/FCF | 7.04 | ||
| Altman-Z | 1.24 |
ROIC/WACC0.78
WACC9.64%
2.3 Liquidity
- A Current Ratio of 0.87 indicates that OTEX may have some problems paying its short term obligations.
- With a Current ratio value of 0.87, OTEX is not doing good in the industry: 81.65% of the companies in the same industry are doing better.
- A Quick Ratio of 0.87 indicates that OTEX may have some problems paying its short term obligations.
- OTEX's Quick ratio of 0.87 is on the low side compared to the rest of the industry. OTEX is outperformed by 80.94% 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.
- The Earnings Per Share has been growing slightly by 5.79% on average over the past years.
- Looking at the last year, OTEX shows a decrease in Revenue. The Revenue has decreased by -7.58% 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)-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
- OTEX is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.33% 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 2Y9.09%
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
- 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.
- 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. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 6.46, which indicates a rather cheap valuation of OTEX.
- Based on the Price/Earnings ratio, OTEX is valued cheaply inside the industry as 91.73% 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 28.30.
- OTEX is valuated cheaply with a Price/Forward Earnings ratio of 5.60.
- Based on the Price/Forward Earnings ratio, OTEX is valued cheaply inside the industry as 93.17% of the companies are valued more expensively.
- OTEX is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.57, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.46 | ||
| Fwd PE | 5.6 |
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 92.09% of the companies listed in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of OTEX indicates a rather cheap valuation: OTEX is cheaper than 94.96% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.1 | ||
| EV/EBITDA | 6.96 |
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.
- OTEX has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)0.65
PEG (5Y)1.12
EPS Next 2Y9.09%
EPS Next 3Y8.33%
5. Dividend
5.1 Amount
- OTEX has a Yearly Dividend Yield of 3.39%.
- The stock price of OTEX dropped by -33.43% 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 0.54, OTEX pays a better dividend. On top of this OTEX pays more dividend than 96.40% 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 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.39% |
5.2 History
- The dividend of OTEX is nicely growing with an annual growth rate of 8.34%!
- OTEX has been paying a dividend for at least 10 years, so it has 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.
- OTEX's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP54.34%
EPS Next 2Y9.09%
EPS Next 3Y8.33%
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 6.46 and the Price/Book (PB) ratio is 1.63.
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%.