Update shared on04 Oct 2025
Fair value Increased 4.90%Analysts have raised their price target for Open Text from $35.90 to $37.66. This change reflects improved sentiment and recent upgrades based on expectations of AI-driven catalysts and margin expansion.
Analyst Commentary
Recent analyst research on Open Text reflects a mix of optimism regarding growth prospects and margin expansion, along with some note of caution due to leadership transitions and execution risks. The following summarizes key themes from bullish and bearish perspectives:
Bullish Takeaways- Bullish analysts are raising price targets in anticipation of catalysts related to artificial intelligence, suggesting the company is developing into a noteworthy AI play.
- Several research notes highlight improved guidance for fiscal year 2026, specifically citing organic growth and the potential for EBITDA margin expansion reaching the high end of the company’s stated range.
- Management’s commitment to business optimization and plans for renewed investment, including potential for tuck-in cloud acquisitions, are seen as paving the way for improved execution and stabilization going forward.
- Positive earnings surprises in recent quarters and robust investor response, including strong post-earnings share performance, reflect growing confidence in the company’s ability to deliver on projected growth.
- Bearish analysts are citing uncertainty stemming from recent executive departures, including the CEO and CFO. These changes raise questions regarding future leadership and strategic direction.
- Some research notes express a wait-and-see approach on the company’s evolving asset mix and cloud momentum. These analysts prefer to see clearer signals before making a more constructive call on growth trends.
- Despite positive valuation signals, certain bearish analysts believe that execution risk remains elevated while the company explores portfolio-shaping opportunities.
- Downgrades to Hold reflect caution over the level of uncertainty surrounding the business’s trajectory, emphasizing the need for evidence of sustained operational progress.
What's in the News
- Barclays raised OpenText's price target to $33 from $29, citing the company's strong Q4 sales beat and optimistic fiscal 2026 guidance (Barclays).
- Steve Rai appointed as Chief Financial Officer. He brings over 30 years of finance experience and a track record at BlackBerry, effective October 6, 2025.
- OpenText added to the FTSE All-World Index, reflecting global recognition and inclusion in a major benchmark.
- Announced a 5% increase in quarterly dividend to $0.275 per share as part of its ongoing dividend program.
- Launched a $300 million share repurchase program, authorizing buyback of up to 24.9 million shares. Nearly 6.1 million shares were repurchased between April and July 2025.
Valuation Changes
- Consensus Analyst Price Target has risen from $35.90 to $37.66, indicating a modest increase in anticipated fair value.
- Discount Rate has increased slightly, moving from 9.80% to 9.81%.
- Revenue Growth projections remain essentially unchanged, holding steady at approximately 1.38%.
- Net Profit Margin is virtually flat, showing only a negligible change and remaining at about 16.02%.
- Future P/E Ratio has risen from 11.90x to 12.49x, which suggests slightly higher valuation expectations for earnings.
Disclaimer
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