Open Text’s analyst price target was held steady at $34.80 as strong financial results and improved 2026 guidance were offset by leadership uncertainty and a lack of clarity on strategic initiatives.
Analyst Commentary
- Bullish analysts point to strong Q4 financial performance, with revenue beating consensus and the highest sales beat since Q3 2023.
- Improved 2026 guidance, highlighting organic growth prospects and EBITDA margin expansion, is viewed positively, with margin targets seen as achievable and at the high end of the range.
- Signs of stabilization are noted following a volatile FY25, supported by a new $300M buyback program and management's commitment to resume tuck-in cloud M&A.
- Ongoing leadership changes, including the CEO departure and recent CFO exit, are creating uncertainty over future direction and have led some bearish analysts to downgrade the stock.
- Analysts await greater clarity on strategic initiatives, particularly around the evolving asset mix and cloud momentum, before turning more constructive on the shares.
What's in the News
- Barclays raised its price target for OpenText to $33 (from $29) and maintained an Equal Weight rating, citing a strong fiscal Q4 sales beat and positive momentum in fiscal 2026 guidance (Periodicals).
- OpenText appointed James McGourlay as Interim CEO following the immediate transition of Mark J. Barrenechea from the CEO, CTO, and Vice Chairman roles; McGourlay brings 25+ years of OpenText experience (Key Developments, 2025-08-11).
- OpenText announced a $300 million share repurchase program through August 2026, with 15.3 million shares (5.87%) already repurchased and cancelled under the previous buyback; a 5% dividend increase to $0.275 per share was also declared (Key Developments, 2025-08-07).
- The Cloud Editions (CE) 25.3 launch introduced new AI-powered tools, private cloud enhancements for strict data sovereignty, and further SAP integration, underscoring leadership in regulated and enterprise cloud markets (Key Developments, 2025-07-22, 2025-07-29).
- A Canadian Sovereign Cloud partnership with TELUS strengthens OpenText’s AI and compliance-oriented services for government and enterprise clients, while the firm confirmed Q4 revenue guidance of ~$1.31 billion amid CFO transition as Chadwick Westlake steps down and Cosmin Balota becomes interim CFO (Key Developments, 2025-07-09, 2025-07-30).
Valuation Changes
Summary of Valuation Changes for Open Text
- The Consensus Analyst Price Target remained effectively unchanged, at $34.80.
- The Consensus Revenue Growth forecasts for Open Text remained effectively unchanged, at 1.4% per annum.
- The Discount Rate for Open Text remained effectively unchanged, at 9.95%.
Disclaimer
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