OPEN TEXT CORP (OTEX) Fundamental Analysis & Valuation
NASDAQ:OTEX • CA6837151068
Current stock price
23.12 USD
+0.87 (+3.91%)
At close:
23.3 USD
+0.18 (+0.78%)
Pre-Market:
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.
- OTEX had a positive operating cash flow in the past year.
- OTEX had positive earnings in each of the past 5 years.
- Each year in the past 5 years OTEX had a positive operating cash flow.
1.2 Ratios
- OTEX has a Return On Assets of 3.22%. This is in the better half of the industry: OTEX outperforms 68.27% of its industry peers.
- OTEX has a better Return On Equity (10.79%) than 76.75% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 7.50%, OTEX is in the better half of the industry, outperforming 78.23% 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 10.91%.
- 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
- Looking at the Profit Margin, with a value of 8.42%, OTEX is in the better half of the industry, outperforming 70.11% of the companies in the same industry.
- OTEX's Profit Margin has improved in the last couple of years.
- OTEX has a Operating Margin of 20.78%. This is amongst the best in the industry. OTEX outperforms 88.56% of its industry peers.
- OTEX's Operating Margin has been stable in the last couple of years.
- OTEX has a Gross Margin of 72.70%. This is comparable to the rest of the industry: OTEX outperforms 59.04% of its industry peers.
- 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
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so OTEX is destroying value.
- The number of shares outstanding for OTEX has been reduced compared to 1 year ago.
- The number of shares outstanding for OTEX has been reduced compared to 5 years ago.
- OTEX has a worse debt/assets ratio than last year.
2.2 Solvency
- Based on the Altman-Z score of 1.20, we must say that OTEX is in the distress zone and has some risk of bankruptcy.
- OTEX has a Altman-Z score of 1.20. This is comparable to the rest of the industry: OTEX outperforms 40.22% 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's Debt to FCF ratio of 7.25 is in line compared to the rest of the industry. OTEX outperforms 50.55% of its industry peers.
- OTEX has a Debt/Equity ratio of 1.57. This is a high value indicating a heavy dependency on external financing.
- OTEX has a Debt to Equity ratio of 1.57. This is in the lower half of the industry: OTEX underperforms 79.34% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.57 | ||
| Debt/FCF | 7.25 | ||
| Altman-Z | 1.2 |
ROIC/WACC0.81
WACC9.28%
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.
- The Current ratio of OTEX (0.94) is worse than 78.23% of its industry peers.
- A Quick Ratio of 0.94 indicates that OTEX may have some problems paying its short term obligations.
- OTEX has a worse Quick ratio (0.94) than 77.86% of its industry peers.
| 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.
- 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 -4.30% in the last 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
- 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.
- OTEX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.54% yearly.
EPS Next Y10.07%
EPS Next 2Y7.76%
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
- 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. OTEX Valuation Analysis
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 5.82, the valuation of OTEX can be described as very cheap.
- OTEX's Price/Earnings ratio is rather cheap when compared to the industry. OTEX is cheaper than 94.46% of the companies in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 27.38, OTEX is valued rather cheaply.
- With a Price/Forward Earnings ratio of 5.20, the valuation of OTEX can be described as very cheap.
- 92.25% of the companies in the same industry are more expensive than OTEX, based on the Price/Forward Earnings ratio.
- OTEX's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 38.20.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.82 | ||
| Fwd PE | 5.2 |
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 94.10% of the companies listed in the same industry.
- 94.10% of the companies in the same industry are more expensive than OTEX, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.6 | ||
| EV/EBITDA | 6.36 |
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)0.58
PEG (5Y)1.01
EPS Next 2Y7.76%
EPS Next 3Y15.35%
5. OTEX Dividend Analysis
5.1 Amount
- With a Yearly Dividend Yield of 4.77%, OTEX is a good candidate for dividend investing.
- The stock price of OTEX dropped by -23.44% 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 0.65, OTEX pays a better dividend. On top of this OTEX pays more dividend than 97.05% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, OTEX pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.77% |
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 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
- 62.08% of the earnings are spent on dividend by OTEX. 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 2Y7.76%
EPS Next 3Y15.35%
OTEX Fundamentals: All Metrics, Ratios and Statistics
23.12
+0.87 (+3.91%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)02-05 2026-02-05/amc
Earnings (Next)05-07 2026-05-07/amc
Inst Owners90.95%
Inst Owner Change0.01%
Ins Owners1.49%
Ins Owner ChangeN/A
Market Cap5.79B
Revenue(TTM)5.18B
Net Income(TTM)436.35M
Analysts78
Price Target39.76 (71.97%)
Short Float %5.12%
Short Ratio5.38
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.77% |
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)-1.07%
PT rev (3m)-0.37%
EPS NQ rev (1m)0%
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 | 5.82 | ||
| Fwd PE | 5.2 | ||
| P/S | 1.12 | ||
| P/FCF | 6.6 | ||
| P/OCF | 5.64 | ||
| P/B | 1.43 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.36 |
EPS(TTM)3.97
EY17.17%
EPS(NY)4.45
Fwd EY19.24%
FCF(TTM)3.51
FCFY15.16%
OCF(TTM)4.1
OCFY17.72%
SpS20.67
BVpS16.14
TBVpS-20.43
PEG (NY)0.58
PEG (5Y)1.01
Graham Number37.9647 (64.21%)
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 | 1.2 |
F-Score6
WACC9.28%
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 2Y7.76%
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 Year14.4%
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%.