OPEN TEXT CORP (OTEX) Stock Fundamental Analysis
NASDAQ:OTEX - Nasdaq - CA6837151068 - Common Stock - Currency: USD
Taking everything into account, OTEX scores 5 out of 10 in our fundamental rating. OTEX was compared to 283 industry peers in the Software industry. OTEX has a medium profitability rating, but doesn't score so well on its financial health evaluation. OTEX is cheap, but on the other hand it scores bad on growth. 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 Return On Assets of 4.81%. This is in the better half of the industry: OTEX outperforms 74.64% of its industry peers.
The Return On Equity of OTEX (15.62%) is better than 84.42% of its industry peers.
With a decent Return On Invested Capital value of 6.12%, OTEX is doing good in the industry, outperforming 78.62% of the companies in the same industry.
OTEX had an Average Return On Invested Capital over the past 3 years of 4.80%. This is significantly below the industry average of 11.99%.
The last Return On Invested Capital (6.12%) for OTEX is above the 3 year average (4.80%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.81% | ||
| ROE | 15.62% | ||
| ROIC | 6.12% |
ROA(3y)2.69%
ROA(5y)2.72%
ROE(3y)8.22%
ROE(5y)7.62%
ROIC(3y)4.8%
ROIC(5y)5.02%
1.3 Margins
OTEX has a Profit Margin of 12.21%. This is in the better half of the industry: OTEX outperforms 79.35% of its industry peers.
OTEX's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 19.44%, OTEX belongs to the top of the industry, outperforming 86.59% of the companies in the same industry.
In the last couple of years the Operating Margin of OTEX has declined.
OTEX has a Gross Margin of 72.64%. This is comparable to the rest of the industry: OTEX outperforms 59.42% of its industry peers.
OTEX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.44% | ||
| PM (TTM) | 12.21% | ||
| GM | 72.64% |
OM growth 3Y-6.86%
OM growth 5Y-3.35%
PM growth 3Y-4.22%
PM growth 5Y-4.13%
GM growth 3Y1.51%
GM growth 5Y1.46%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), OTEX is destroying value.
OTEX has less shares outstanding than it did 1 year ago.
OTEX has less shares outstanding than it did 5 years ago.
OTEX has a better 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.
OTEX's Altman-Z score of 1.32 is on the low side compared to the rest of the industry. OTEX is outperformed by 62.32% of its industry peers.
OTEX has a debt to FCF ratio of 9.35. This is a negative value and a sign of low solvency as OTEX would need 9.35 years to pay back of all of its debts.
OTEX's Debt to FCF ratio of 9.35 is in line compared to the rest of the industry. OTEX outperforms 49.64% of its industry peers.
OTEX has a Debt/Equity ratio of 1.50. This is a high value indicating a heavy dependency on external financing.
OTEX has a worse Debt to Equity ratio (1.50) than 82.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.5 | ||
| Debt/FCF | 9.35 | ||
| Altman-Z | 1.32 |
ROIC/WACC0.63
WACC9.64%
2.3 Liquidity
A Current Ratio of 0.87 indicates that OTEX may have some problems paying its short term obligations.
With a Current ratio value of 0.87, OTEX is not doing good in the industry: 79.35% of the companies in the same industry are doing better.
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 78.99% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.87 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 1.80% over the past year.
Measured over the past years, OTEX shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.60% on average per year.
The Revenue has decreased by -4.97% in the past year.
OTEX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 15.00% yearly.
EPS 1Y (TTM)1.8%
EPS 3Y7.15%
EPS 5Y8.6%
EPS Q2Q%-10.48%
Revenue 1Y (TTM)-4.97%
Revenue growth 3Y19.44%
Revenue growth 5Y15%
Sales Q2Q%-13.05%
3.2 Future
The Earnings Per Share is expected to grow by 3.56% on average over the next years.
Based on estimates for the next years, OTEX will show a decrease in Revenue. The Revenue will decrease by -1.83% on average per year.
EPS Next Y-10.93%
EPS Next 2Y0.06%
EPS Next 3Y3.56%
EPS Next 5YN/A
Revenue Next Year-8.77%
Revenue Next 2Y-3.2%
Revenue Next 3Y-1.83%
Revenue Next 5YN/A
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 decreasing.
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
OTEX is valuated cheaply with a Price/Earnings ratio of 7.15.
Based on the Price/Earnings ratio, OTEX is valued cheaply inside the industry as 95.29% of the companies are valued more expensively.
OTEX's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 29.19.
OTEX is valuated cheaply with a Price/Forward Earnings ratio of 6.78.
Based on the Price/Forward Earnings ratio, OTEX is valued cheaper than 97.83% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 96.58, OTEX is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.15 | ||
| Fwd PE | 6.78 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, OTEX is valued cheaply inside the industry as 96.01% of the companies are valued more expensively.
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 | 11.02 | ||
| EV/EBITDA | 7.44 |
4.3 Compensation for Growth
OTEX has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.83
EPS Next 2Y0.06%
EPS Next 3Y3.56%
5. Dividend
5.1 Amount
OTEX has a Yearly Dividend Yield of 3.30%. 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 12.73. OTEX pays more dividend than 97.10% of the companies in the same industry.
OTEX's Dividend Yield is a higher than the S&P500 average which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.3% |
5.2 History
On average, the dividend of OTEX grows each year by 9.59%, 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)9.59%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
41.07% of the earnings are spent on dividend by OTEX. This is a bit on the high side, but may be sustainable.
The dividend of OTEX is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP41.07%
EPS Next 2Y0.06%
EPS Next 3Y3.56%
OPEN TEXT CORP
NASDAQ:OTEX (2/12/2025, 8:00:03 PM)
After market: 28.3 0 (0%)28.3
-0.36 (-1.26%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners76.99%
Inst Owner Change-26.62%
Ins Owners1.99%
Ins Owner ChangeN/A
Market Cap7.52B
Analysts78
Price Target41.21 (45.62%)
Short Float %1.7%
Short Ratio6.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.3% |
Yearly Dividend0.99
Dividend Growth(5Y)9.59%
DP41.07%
Div Incr Years11
Div Non Decr Years11
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)15.86%
Min EPS beat(2)13.44%
Max EPS beat(2)18.29%
EPS beat(4)2
Avg EPS beat(4)6.21%
Min EPS beat(4)-5.46%
Max EPS beat(4)18.29%
EPS beat(8)6
Avg EPS beat(8)11.01%
EPS beat(12)9
Avg EPS beat(12)8.52%
EPS beat(16)12
Avg EPS beat(16)7.19%
Revenue beat(2)0
Avg Revenue beat(2)-1.81%
Min Revenue beat(2)-3.06%
Max Revenue beat(2)-0.56%
Revenue beat(4)0
Avg Revenue beat(4)-2.49%
Min Revenue beat(4)-5.21%
Max Revenue beat(4)-0.56%
Revenue beat(8)2
Avg Revenue beat(8)-1.05%
Revenue beat(12)3
Avg Revenue beat(12)-1.01%
Revenue beat(16)5
Avg Revenue beat(16)-0.61%
PT rev (1m)-0.16%
PT rev (3m)-16.89%
EPS NQ rev (1m)0.14%
EPS NQ rev (3m)-27.56%
EPS NY rev (1m)-0.1%
EPS NY rev (3m)1.12%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-14.41%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.15 | ||
| Fwd PE | 6.78 | ||
| P/S | 1.39 | ||
| P/FCF | 11.02 | ||
| P/OCF | 8.96 | ||
| P/B | 1.78 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.44 |
EPS(TTM)3.96
EY13.99%
EPS(NY)4.17
Fwd EY14.75%
FCF(TTM)2.57
FCFY9.08%
OCF(TTM)3.16
OCFY11.17%
SpS20.36
BVpS15.91
TBVpS-20.62
PEG (NY)N/A
PEG (5Y)0.83
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.81% | ||
| ROE | 15.62% | ||
| ROCE | 9.29% | ||
| ROIC | 6.12% | ||
| ROICexc | 6.79% | ||
| ROICexgc | 139.82% | ||
| OM | 19.44% | ||
| PM (TTM) | 12.21% | ||
| GM | 72.64% | ||
| FCFM | 12.62% |
ROA(3y)2.69%
ROA(5y)2.72%
ROE(3y)8.22%
ROE(5y)7.62%
ROIC(3y)4.8%
ROIC(5y)5.02%
ROICexc(3y)5.58%
ROICexc(5y)6.02%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)7.28%
ROCE(5y)7.62%
ROICexcg growth 3Y91.83%
ROICexcg growth 5Y64.71%
ROICexc growth 3Y-3.34%
ROICexc growth 5Y0.03%
OM growth 3Y-6.86%
OM growth 5Y-3.35%
PM growth 3Y-4.22%
PM growth 5Y-4.13%
GM growth 3Y1.51%
GM growth 5Y1.46%
F-Score8
Asset Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.5 | ||
| Debt/FCF | 9.35 | ||
| Debt/EBITDA | 3.67 | ||
| Cap/Depr | 23.11% | ||
| Cap/Sales | 2.9% | ||
| Interest Coverage | 2.44 | ||
| Cash Conversion | 48.51% | ||
| Profit Quality | 103.37% | ||
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.87 | ||
| Altman-Z | 1.32 |
F-Score8
WACC9.64%
ROIC/WACC0.63
Cap/Depr(3y)19.01%
Cap/Depr(5y)16.68%
Cap/Sales(3y)2.73%
Cap/Sales(5y)2.48%
Profit Quality(3y)277.81%
Profit Quality(5y)294.29%
High Growth Momentum
Growth
EPS 1Y (TTM)1.8%
EPS 3Y7.15%
EPS 5Y8.6%
EPS Q2Q%-10.48%
EPS Next Y-10.93%
EPS Next 2Y0.06%
EPS Next 3Y3.56%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.97%
Revenue growth 3Y19.44%
Revenue growth 5Y15%
Sales Q2Q%-13.05%
Revenue Next Year-8.77%
Revenue Next 2Y-3.2%
Revenue Next 3Y-1.83%
Revenue Next 5YN/A
EBIT growth 1Y21.69%
EBIT growth 3Y11.24%
EBIT growth 5Y11.15%
EBIT Next Year-4.05%
EBIT Next 3Y2.36%
EBIT Next 5YN/A
FCF growth 1Y-12.25%
FCF growth 3Y-0.17%
FCF growth 5Y-0.1%
OCF growth 1Y-6.93%
OCF growth 3Y3.37%
OCF growth 5Y2%