31.74 USD
-0.84 (-2.58%)
31.74 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to OTEX. OTEX was compared to 276 industry peers in the Software industry. While OTEX has a great profitability rating, there are quite some concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on OTEX. OTEX also has an excellent dividend rating.
1. Profitability
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.
Each year in the past 5 years OTEX had a positive operating cash flow.
1.2 Ratios
The Return On Assets of OTEX (3.70%) is better than 68.48% of its industry peers.
OTEX has a better Return On Equity (12.61%) than 76.09% of its industry peers.
OTEX's Return On Invested Capital of 7.53% is fine compared to the rest of the industry. OTEX outperforms 77.17% of its industry peers.
OTEX had an Average Return On Invested Capital over the past 3 years of 6.00%. This is below the industry average of 10.78%.
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 has a better Profit Margin (9.60%) than 70.29% 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 20.73%, OTEX belongs to the best of the industry, outperforming 86.23% 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.
Looking at the Gross Margin, with a value of 72.51%, OTEX is in line with its industry, outperforming 57.97% 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.
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 1.32, we must say that OTEX is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.32, OTEX is in line with its industry, outperforming 41.30% of the companies in the same industry.
The Debt to FCF ratio of OTEX is 7.04, which is on the high side as it means it would take OTEX, 7.04 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 7.04, OTEX perfoms like the industry average, outperforming 52.17% of the companies in the same industry.
A Debt/Equity ratio of 1.60 is on the high side and indicates that OTEX has dependencies on debt financing.
OTEX's Debt to Equity ratio of 1.60 is on the low side compared to the rest of the industry. OTEX is outperformed by 80.80% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.6 | ||
| Debt/FCF | 7.04 | ||
| Altman-Z | 1.32 |
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 81.88% 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 worse Quick ratio (0.87) than 81.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.87 |
3. Growth
3.1 Past
OTEX shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -3.42%.
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.
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)-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
The Earnings Per Share is expected to grow by 8.33% on average over the next years. This is quite good.
OTEX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.54% yearly.
EPS Next Y10.02%
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.
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 8.04 indicates a reasonable valuation of OTEX.
90.58% of the companies in the same industry are more expensive than OTEX, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of OTEX to the average of the S&P500 Index (26.60), we can say OTEX is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 6.96, the valuation of OTEX can be described as very cheap.
OTEX's Price/Forward Earnings ratio is rather cheap when compared to the industry. OTEX is cheaper than 93.12% of the companies in the same industry.
OTEX's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 23.23.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.04 | ||
| Fwd PE | 6.96 |
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 92.03% of the companies listed in the same industry.
94.20% 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 | 8.83 | ||
| EV/EBITDA | 7.75 |
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.
OTEX has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)0.8
PEG (5Y)1.39
EPS Next 2Y9.09%
EPS Next 3Y8.33%
5. Dividend
5.1 Amount
OTEX has a Yearly Dividend Yield of 3.03%.
Compared to an average industry Dividend Yield of 0.54, OTEX pays a better dividend. On top of this OTEX pays more dividend than 96.38% 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 1.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.03% |
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
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%
31.74
-0.84 (-2.58%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners82.98%
Inst Owner Change0%
Ins Owners1.48%
Ins Owner ChangeN/A
Market Cap8.00B
Revenue(TTM)5.19B
Net Income(TTM)498.12M
Analysts78
Price Target39.9 (25.71%)
Short Float %4.17%
Short Ratio9.57
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.03% |
Yearly Dividend1.04
Dividend Growth(5Y)8.34%
DP54.34%
Div Incr Years11
Div Non Decr Years11
Ex-DateN/A
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)-10.9%
PT rev (3m)-11.48%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-4.09%
EPS NY rev (1m)0%
EPS NY rev (3m)0.03%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.67%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)-0.38%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.04 | ||
| Fwd PE | 6.96 | ||
| P/S | 1.54 | ||
| P/FCF | 8.83 | ||
| P/OCF | 7.57 | ||
| P/B | 2.02 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.75 |
EPS(TTM)3.95
EY12.44%
EPS(NY)4.56
Fwd EY14.36%
FCF(TTM)3.59
FCFY11.32%
OCF(TTM)4.19
OCFY13.2%
SpS20.58
BVpS15.68
TBVpS-21.2
PEG (NY)0.8
PEG (5Y)1.39
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 | 1.32 |
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 Y10.02%
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 Year1.28%
Revenue Next 2Y1.54%
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.
What is the valuation status of OPEN TEXT CORP (OTEX) stock?
ChartMill assigns a valuation rating of 8 / 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 8.04 and the Price/Book (PB) ratio is 2.02.
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%.