OPEN TEXT CORP (OTEX) Fundamental Analysis & Valuation
NASDAQ:OTEX • CA6837151068
Current stock price
22.76 USD
+0.24 (+1.07%)
At close:
22.76 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
- In the past year OTEX was profitable.
- 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
- The Return On Assets of OTEX (3.22%) is better than 68.73% of its industry peers.
- OTEX has a better Return On Equity (10.79%) than 77.09% of its industry peers.
- With a decent Return On Invested Capital value of 7.50%, OTEX is doing good in the industry, outperforming 78.55% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for OTEX is below the industry average of 10.99%.
- The 3 year average ROIC (6.00%) for OTEX is below the current ROIC(7.50%), indicating increased profibility in the last year.
| 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 70.55% of its industry peers.
- In the last couple of years the Profit Margin of OTEX has grown nicely.
- 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.
- 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 (72.70%) which is in line with 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. OTEX Health Analysis
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.
- The number of shares outstanding for OTEX has been reduced compared to 5 years ago.
- Compared to 1 year ago, OTEX has a worse debt to assets ratio.
2.2 Solvency
- Based on the Altman-Z score of 1.19, we must say that OTEX is in the distress zone and has some risk of bankruptcy.
- OTEX has a Altman-Z score (1.19) which is comparable to the rest of the industry.
- 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.
- OTEX has a Debt to FCF ratio (7.25) which is comparable to the rest of the industry.
- OTEX has a Debt/Equity ratio of 1.57. This is a high value indicating a heavy dependency on external financing.
- OTEX has a worse Debt to Equity ratio (1.57) than 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
WACC9.27%
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 77.82% 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
- The Earnings Per Share has been growing slightly by 0.25% over the past year.
- 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.
- The Revenue has decreased by -4.30% in the past year.
- Measured over the past years, OTEX shows a quite strong growth in Revenue. The Revenue has been growing by 10.69% on average per year.
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
- OTEX is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.35% yearly.
- 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
- The Price/Earnings ratio is 5.73, which indicates a rather cheap valuation of OTEX.
- Based on the Price/Earnings ratio, OTEX is valued cheaply inside the industry as 94.55% of the companies are valued more expensively.
- OTEX is valuated cheaply when we compare the Price/Earnings ratio to 26.21, which is the current average of the S&P500 Index.
- A Price/Forward Earnings ratio of 5.12 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 92.73% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 23.13. OTEX is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.73 | ||
| Fwd PE | 5.12 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, OTEX is valued cheaper than 93.82% of the companies 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 93.82% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.49 | ||
| EV/EBITDA | 6.3 |
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.
- OTEX's earnings are expected to grow with 15.35% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.57
PEG (5Y)0.99
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.
- The stock price of OTEX dropped by -30.55% 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 0.67, 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.
- OTEX's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP62.08%
EPS Next 2Y7.69%
EPS Next 3Y15.35%
OTEX Fundamentals: All Metrics, Ratios and Statistics
22.76
+0.24 (+1.07%)
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 Cap5.70B
Revenue(TTM)5.18B
Net Income(TTM)436.35M
Analysts78
Price Target40.19 (76.58%)
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 | 5.73 | ||
| Fwd PE | 5.12 | ||
| P/S | 1.1 | ||
| P/FCF | 6.49 | ||
| P/OCF | 5.55 | ||
| P/B | 1.41 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.3 |
EPS(TTM)3.97
EY17.44%
EPS(NY)4.44
Fwd EY19.51%
FCF(TTM)3.51
FCFY15.4%
OCF(TTM)4.1
OCFY18%
SpS20.67
BVpS16.14
TBVpS-20.43
PEG (NY)0.57
PEG (5Y)0.99
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
WACC9.27%
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%.