OPEN TEXT CORP (OTEX) Stock Fundamental Analysis
NASDAQ:OTEX • CA6837151068
24.75 USD
+0.24 (+0.98%)
At close: Mar 3, 2026
24.85 USD
+0.1 (+0.4%)
After Hours: 3/3/2026, 6:19:20 PM
Overall OTEX gets a fundamental rating of 5 out of 10. We evaluated OTEX against 276 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 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.
- 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
- OTEX has a Return On Assets of 3.22%. This is in the better half of the industry: OTEX outperforms 67.39% of its industry peers.
- OTEX's Return On Equity of 10.79% is fine compared to the rest of the industry. OTEX outperforms 75.36% of its industry peers.
- With a decent Return On Invested Capital value of 7.50%, OTEX is doing good in the industry, outperforming 78.99% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for OTEX is below the industry average of 10.79%.
- 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
- The Profit Margin of OTEX (8.42%) is better than 69.57% of its industry peers.
- In the last couple of years the Profit Margin of OTEX has grown nicely.
- OTEX's Operating Margin of 20.78% is amongst the best of the industry. OTEX outperforms 88.77% of its industry peers.
- In the last couple of years the Operating Margin of OTEX has remained more or less at the same level.
- The Gross Margin of OTEX (72.70%) is comparable to the rest of the 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 | 20.78% | ||
| 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. Health
2.1 Basic Checks
- OTEX has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- The number of shares outstanding for OTEX has been reduced compared to 1 year ago.
- OTEX has less shares outstanding than it did 5 years ago.
- OTEX has a worse debt/assets ratio than last year.
2.2 Solvency
- Based on the Altman-Z score of 1.22, we must say that OTEX is in the distress zone and has some risk of bankruptcy.
- With a Altman-Z score value of 1.22, OTEX perfoms like the industry average, outperforming 44.20% of the companies in the same 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 of 7.25. This is comparable to the rest of the industry: OTEX outperforms 51.45% of its industry peers.
- A Debt/Equity ratio of 1.57 is on the high side and indicates that OTEX has dependencies on debt financing.
- OTEX's Debt to Equity ratio of 1.57 is on the low side compared to the rest of the industry. OTEX is outperformed by 80.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.57 | ||
| Debt/FCF | 7.25 | ||
| Altman-Z | 1.22 |
ROIC/WACC0.79
WACC9.55%
2.3 Liquidity
- A Current Ratio of 0.94 indicates that OTEX may have some problems paying its short term obligations.
- The Current ratio of OTEX (0.94) is worse than 78.26% 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.
- OTEX has a Quick ratio of 0.94. This is in the lower half of the industry: OTEX underperforms 77.90% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
- OTEX shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.25%.
- OTEX shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.79% yearly.
- OTEX shows a decrease in Revenue. In the last year, the revenue decreased by -4.30%.
- The Revenue has been growing by 10.69% on average over the past years. This is quite good.
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 8.33% yearly.
- The Revenue is expected to grow by 4.54% on average over the next years.
EPS Next Y9.99%
EPS Next 2Y9.09%
EPS Next 3Y8.33%
EPS Next 5YN/A
Revenue Next Year1.32%
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. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 6.23, which indicates a rather cheap valuation of OTEX.
- Compared to the rest of the industry, the Price/Earnings ratio of OTEX indicates a rather cheap valuation: OTEX is cheaper than 94.93% of the companies listed in the same industry.
- When comparing the Price/Earnings ratio of OTEX to the average of the S&P500 Index (26.83), we can say OTEX is valued rather cheaply.
- OTEX is valuated cheaply with a Price/Forward Earnings ratio of 5.43.
- 94.20% 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 24.95.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.23 | ||
| Fwd PE | 5.43 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, OTEX is valued cheaper than 93.48% of the companies in the same industry.
- OTEX's Price/Free Cash Flow ratio is rather cheap when compared to the industry. OTEX is cheaper than 94.20% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.06 | ||
| EV/EBITDA | 6.56 |
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)0.62
PEG (5Y)1.08
EPS Next 2Y9.09%
EPS Next 3Y8.33%
5. Dividend
5.1 Amount
- OTEX has a Yearly Dividend Yield of 3.95%. Purely for dividend investing, there may be better candidates out there.
- The stock price of OTEX dropped by -26.16% 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 0.57, OTEX pays a better dividend. On top of this OTEX pays more dividend than 96.38% 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 | 3.95% |
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 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
- 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 the earnings are growing slower. This means the dividend growth is not sustainable.
DP62.08%
EPS Next 2Y9.09%
EPS Next 3Y8.33%
24.75
+0.24 (+0.98%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)02-05 2026-02-05/amc
Earnings (Next)04-28 2026-04-28/amc
Inst Owners82.98%
Inst Owner Change12.27%
Ins Owners1.48%
Ins Owner ChangeN/A
Market Cap6.20B
Revenue(TTM)5.18B
Net Income(TTM)436.35M
Analysts78
Price Target40.19 (62.38%)
Short Float %4.71%
Short Ratio6.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.95% |
Yearly Dividend1.04
Dividend Growth(5Y)8.34%
DP62.08%
Div Incr Years11
Div Non Decr Years11
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)1.2%
PT rev (3m)-10.27%
EPS NQ rev (1m)-7.86%
EPS NQ rev (3m)-6.13%
EPS NY rev (1m)0%
EPS NY rev (3m)0.21%
Revenue NQ rev (1m)-1.22%
Revenue NQ rev (3m)-1.52%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)-0.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.23 | ||
| Fwd PE | 5.43 | ||
| P/S | 1.2 | ||
| P/FCF | 7.06 | ||
| P/OCF | 6.04 | ||
| P/B | 1.53 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.56 |
EPS(TTM)3.97
EY16.04%
EPS(NY)4.56
Fwd EY18.42%
FCF(TTM)3.51
FCFY14.16%
OCF(TTM)4.1
OCFY16.56%
SpS20.67
BVpS16.14
TBVpS-20.43
PEG (NY)0.62
PEG (5Y)1.08
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 | 1.22 |
F-Score6
WACC9.55%
ROIC/WACC0.79
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 Y9.99%
EPS Next 2Y9.09%
EPS Next 3Y8.33%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.3%
Revenue growth 3Y13.94%
Revenue growth 5Y10.69%
Sales Q2Q%-0.58%
Revenue Next Year1.32%
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 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 6.23 and the Price/Book (PB) ratio is 1.53.
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 62.08%.