OPEN TEXT CORP (OTEX) Stock Fundamental Analysis
NASDAQ:OTEX • CA6837151068
24.71 USD
+0.4 (+1.65%)
At close: Feb 18, 2026
24.71 USD
0 (0%)
After Hours: 2/18/2026, 5:20:02 PM
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 belongs to the best of the industry regarding profitability, there are concerns on its financial health. OTEX may be a bit undervalued, certainly considering the very reasonable score on growth Finally OTEX also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- OTEX had positive earnings in the past year.
- In the past year OTEX had a positive cash flow from operations.
- 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 better Return On Assets (3.22%) than 65.58% of its industry peers.
- Looking at the Return On Equity, with a value of 10.79%, OTEX is in the better half of the industry, outperforming 73.91% of the companies in the same industry.
- OTEX has a better Return On Invested Capital (7.50%) than 77.17% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for OTEX is below the industry average of 10.64%.
- 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
- With a decent Profit Margin value of 8.42%, OTEX is doing good in the industry, outperforming 67.03% of the companies in the same industry.
- 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 86.23% of its industry peers.
- OTEX's Operating Margin has been stable in the last couple of years.
- OTEX has a Gross Margin (72.70%) which 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
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), OTEX is destroying value.
- Compared to 1 year ago, OTEX has less shares outstanding
- OTEX has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, OTEX has a worse debt to assets ratio.
2.2 Solvency
- OTEX has an Altman-Z score of 1.22. This is a bad value and indicates that OTEX is not financially healthy and even has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 1.22, OTEX is in line with its industry, outperforming 43.12% of the companies in the same industry.
- 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.
- With a Debt to FCF ratio value of 7.25, OTEX perfoms like the industry average, outperforming 51.09% of the companies in the same industry.
- OTEX has a Debt/Equity ratio of 1.57. This is a high value indicating a heavy dependency on external 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 81.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.57 | ||
| Debt/FCF | 7.25 | ||
| Altman-Z | 1.22 |
ROIC/WACC0.79
WACC9.54%
2.3 Liquidity
- A Current Ratio of 0.94 indicates that OTEX may have some problems paying its short term obligations.
- With a Current ratio value of 0.94, OTEX is not doing good in the industry: 77.54% of the companies in the same industry are doing better.
- 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: 77.17% of the companies in the same industry are doing better.
| 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.
- OTEX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.54% yearly.
EPS Next Y9.99%
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
- The Price/Earnings ratio is 6.22, which indicates a rather cheap valuation of OTEX.
- OTEX's Price/Earnings ratio is rather cheap when compared to the industry. OTEX is cheaper than 94.20% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 27.27. OTEX is valued rather cheaply when compared to this.
- OTEX is valuated cheaply with a Price/Forward Earnings ratio of 5.42.
- Based on the Price/Forward Earnings ratio, OTEX is valued cheaply inside the industry as 93.84% of the companies are valued more expensively.
- The average S&P500 Price/Forward Earnings ratio is at 28.16. OTEX is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.22 | ||
| Fwd PE | 5.42 |
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 91.67% of the companies listed in the same industry.
- OTEX's Price/Free Cash Flow ratio is rather cheap when compared to the industry. OTEX is cheaper than 94.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.05 | ||
| EV/EBITDA | 6.53 |
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.
PEG (NY)0.62
PEG (5Y)1.07
EPS Next 2Y9.09%
EPS Next 3Y8.33%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 4.19%, OTEX is a good candidate for dividend investing.
- In the last 3 months the price of OTEX has falen by -25.32%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
- Compared to an average industry Dividend Yield of 0.60, 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 1.84, OTEX pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.19% |
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 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.
- OTEX's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP62.08%
EPS Next 2Y9.09%
EPS Next 3Y8.33%
24.71
+0.4 (+1.65%)
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 Change13.15%
Ins Owners1.48%
Ins Owner ChangeN/A
Market Cap6.19B
Revenue(TTM)5.18B
Net Income(TTM)436.35M
Analysts78
Price Target40.28 (63.01%)
Short Float %3.76%
Short Ratio5.4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.19% |
Yearly Dividend1.04
Dividend Growth(5Y)8.34%
DP62.08%
Div Incr Years11
Div Non Decr Years11
Ex-DateN/A
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)0.95%
PT rev (3m)-10.05%
EPS NQ rev (1m)-5.88%
EPS NQ rev (3m)-6.29%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)0.21%
Revenue NQ rev (1m)-1.22%
Revenue NQ rev (3m)-1.37%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.22 | ||
| Fwd PE | 5.42 | ||
| P/S | 1.2 | ||
| P/FCF | 7.05 | ||
| P/OCF | 6.03 | ||
| P/B | 1.53 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.53 |
EPS(TTM)3.97
EY16.07%
EPS(NY)4.56
Fwd EY18.45%
FCF(TTM)3.51
FCFY14.19%
OCF(TTM)4.1
OCFY16.58%
SpS20.67
BVpS16.14
TBVpS-20.43
PEG (NY)0.62
PEG (5Y)1.07
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
WACC9.54%
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 Year1.28%
Revenue Next 2Y1.54%
Revenue Next 3Y1.48%
Revenue Next 5Y4.54%
EBIT growth 1Y2.28%
EBIT growth 3Y14.51%
EBIT growth 5Y11.45%
EBIT Next Year14.34%
EBIT Next 3Y7.75%
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 6.22 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 8 / 10 and the dividend payout ratio is 62.08%.