32.22 USD
-0.06 (-0.19%)
32.1 USD
-0.12 (-0.37%)
We assign a fundamental rating of 5 out of 10 to OTEX. OTEX was compared to 276 industry peers in the Software industry. OTEX has an excellent profitability rating, but there are concerns on its financial health. OTEX scores decently on growth, while it is valued quite cheap. This could make an interesting combination. Finally 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.
In the past 5 years OTEX has always been profitable.
In the past 5 years OTEX always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.70%, OTEX is in the better half of the industry, outperforming 68.48% 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 76.09% of its industry peers.
With a decent Return On Invested Capital value of 7.53%, OTEX is doing good in the industry, outperforming 77.17% 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 10.78%.
The 3 year average ROIC (6.00%) for OTEX is below the current ROIC(7.53%), indicating increased profibility in the last year.
| 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 Profit Margin of 9.60%. This is in the better half of the industry: OTEX outperforms 70.29% of its industry peers.
OTEX's Profit Margin has improved in the last couple of years.
OTEX's Operating Margin of 20.73% is amongst the best of the industry. OTEX outperforms 86.23% of its industry peers.
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 (72.51%) 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 | 20.73% | ||
| 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.
The number of shares outstanding for OTEX has been reduced compared to 1 year ago.
Compared to 5 years ago, OTEX has less shares outstanding
Compared to 1 year ago, OTEX has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.33, we must say that OTEX is in the distress zone and has some risk of bankruptcy.
OTEX has a Altman-Z score of 1.33. This is comparable to the rest of the industry: OTEX outperforms 41.30% 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 52.17% 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.
The Debt to Equity ratio of OTEX (1.60) is worse than 80.80% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.6 | ||
| Debt/FCF | 7.04 | ||
| Altman-Z | 1.33 |
ROIC/WACC0.77
WACC9.75%
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.
Looking at the Current ratio, with a value of 0.87, OTEX is doing worse than 81.88% of the companies in the same industry.
OTEX has a Quick 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's Quick ratio of 0.87 is on the low side compared to the rest of the industry. OTEX is outperformed by 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%.
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.
OTEX shows a decrease in Revenue. In the last year, the revenue decreased by -7.58%.
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
The Earnings Per Share is expected to grow by 8.33% on average over the next years. This is quite good.
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 Y10.02%
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
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. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 8.16, the valuation of OTEX can be described as reasonable.
OTEX's Price/Earnings ratio is rather cheap when compared to the industry. OTEX is cheaper than 90.58% of the companies in the same industry.
When comparing the Price/Earnings ratio of OTEX to the average of the S&P500 Index (26.92), we can say OTEX is valued rather cheaply.
With a Price/Forward Earnings ratio of 7.07, the valuation of OTEX can be described as very cheap.
Based on the Price/Forward Earnings ratio, OTEX is valued 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 23.57.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.16 | ||
| Fwd PE | 7.07 |
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 92.39% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, OTEX is valued cheaper than 94.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.96 | ||
| EV/EBITDA | 7.83 |
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)0.81
PEG (5Y)1.41
EPS Next 2Y9.09%
EPS Next 3Y8.33%
5. Dividend
5.1 Amount
OTEX has a Yearly Dividend Yield of 3.03%. Purely for dividend investing, there may be better candidates out there.
OTEX's Dividend Yield is rather good when compared to the industry average which is at 0.54. OTEX pays more dividend than 96.38% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.94, OTEX pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.03% |
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 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%
32.22
-0.06 (-0.19%)
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 Cap8.12B
Revenue(TTM)5.19B
Net Income(TTM)498.12M
Analysts78
Price Target39.9 (23.84%)
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 | 8.16 | ||
| Fwd PE | 7.07 | ||
| P/S | 1.57 | ||
| P/FCF | 8.96 | ||
| P/OCF | 7.69 | ||
| P/B | 2.06 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.83 |
EPS(TTM)3.95
EY12.26%
EPS(NY)4.56
Fwd EY14.15%
FCF(TTM)3.59
FCFY11.15%
OCF(TTM)4.19
OCFY13.01%
SpS20.58
BVpS15.68
TBVpS-21.2
PEG (NY)0.81
PEG (5Y)1.41
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 | 1.33 |
F-Score6
WACC9.75%
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 8.16 and the Price/Book (PB) ratio is 2.06.
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%.