OTEX

Open TextNasdaqGS:OTEX Stock Report

Market Cap

US$13.8b

7D

-3.8%

1Y

22.0%

Updated

18 Sep, 2021

Data

Company Financials +
OTEX fundamental analysis
Snowflake Score
Valuation4/6
Future Growth3/6
Past Performance4/6
Financial Health4/6
Dividends3/6

OTEX Overview

Open Text Corporation engages in the designs, develops, markets, and sells information management software and solutions.

Open Text Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Open Text
Historical stock prices
Current Share PriceUS$51.17
52 Week HighUS$36.18
52 Week LowUS$55.25
Beta0.95
1 Month Change-2.65%
3 Month Change2.92%
1 Year Change22.04%
3 Year Change34.06%
5 Year Change55.72%
Change since IPO1,760.73%

Recent News & Updates

Aug 24
Open Text (NASDAQ:OTEX) Is Increasing Its Dividend To US$0.22

Open Text (NASDAQ:OTEX) Is Increasing Its Dividend To US$0.22

Open Text Corporation's ( NASDAQ:OTEX ) dividend will be increasing to US$0.22 on 24th of September. This will take the...

Aug 10
Open Text's (NASDAQ:OTEX) Dividend Will Be Increased To US$0.22

Open Text's (NASDAQ:OTEX) Dividend Will Be Increased To US$0.22

Open Text Corporation's ( NASDAQ:OTEX ) dividend will be increasing to US$0.22 on 24th of September. This makes the...

Shareholder Returns

OTEXUS SoftwareUS Market
7D-3.8%0.9%-0.6%
1Y22.0%42.9%33.8%

Return vs Industry: OTEX underperformed the US Software industry which returned 42.9% over the past year.

Return vs Market: OTEX underperformed the US Market which returned 33.8% over the past year.

Price Volatility

Is OTEX's price volatile compared to industry and market?
OTEX volatility
OTEX Beta0.95
Industry Beta0.95
Market Beta1

Stable Share Price: OTEX is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: OTEX's weekly volatility (2%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
199114,300Mark Barrenecheahttps://www.opentext.com

Open Text Corporation engages in the designs, develops, markets, and sells information management software and solutions. It offers content services; business network that manages data within the organization and outside the firewall; security and protection solutions for defending against cyber threats, and preparing for business continuity and response in the event of a breach; digital investigation and forensic security solutions; OpenText security solutions to address information cyber resilience needs; Carbonite and Webroot products; and OpenText Information Management software platform. The company also provides Discovery platform that provides forensics and unstructured data analytics; OpenText Developer Cloud; key developer API services; AI and analytics that leverages structured or unstructured data; digital process automation solutions, which enables organizations to transform into digital data-driven businesses; and OpenText Digital Experience platform.

Open Text Fundamentals Summary

How do Open Text's earnings and revenue compare to its market cap?
OTEX fundamental statistics
Market CapUS$13.83b
Earnings (TTM)US$310.67m
Revenue (TTM)US$3.39b

44.5x

P/E Ratio

4.1x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
OTEX income statement (TTM)
RevenueUS$3.39b
Cost of RevenueUS$815.67m
Gross ProfitUS$2.57b
ExpensesUS$2.26b
EarningsUS$310.67m

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)1.14
Gross Margin75.91%
Net Profit Margin9.17%
Debt/Equity Ratio87.5%

How did OTEX perform over the long term?

See historical performance and comparison

Dividends

1.7%

Current Dividend Yield

68%

Payout Ratio

Valuation

Is Open Text undervalued compared to its fair value and its price relative to the market?

36.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: OTEX ($51.17) is trading below our estimate of fair value ($80.92)

Significantly Below Fair Value: OTEX is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: OTEX is good value based on its PE Ratio (44.5x) compared to the US Software industry average (55.9x).

PE vs Market: OTEX is poor value based on its PE Ratio (44.5x) compared to the US market (17.8x).


Price to Earnings Growth Ratio

PEG Ratio: OTEX is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: OTEX is good value based on its PB Ratio (3.4x) compared to the US Software industry average (7.6x).


Future Growth

How is Open Text forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

32.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: OTEX's forecast earnings growth (32% per year) is above the savings rate (2%).

Earnings vs Market: OTEX's earnings (32% per year) are forecast to grow faster than the US market (14.9% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: OTEX's revenue (1.9% per year) is forecast to grow slower than the US market (9.8% per year).

High Growth Revenue: OTEX's revenue (1.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if OTEX's Return on Equity is forecast to be high in 3 years time


Past Performance

How has Open Text performed over the past 5 years?

-33.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: OTEX has high quality earnings.

Growing Profit Margin: OTEX's current net profit margins (9.2%) are higher than last year (7.5%).


Past Earnings Growth Analysis

Earnings Trend: OTEX's earnings have declined by 33% per year over the past 5 years.

Accelerating Growth: OTEX's earnings growth over the past year (32.6%) exceeds its 5-year average (-33% per year).

Earnings vs Industry: OTEX earnings growth over the past year (32.6%) exceeded the Software industry 22.1%.


Return on Equity

High ROE: OTEX's Return on Equity (7.6%) is considered low.


Financial Health

How is Open Text's financial position?


Financial Position Analysis

Short Term Liabilities: OTEX's short term assets ($2.2B) exceed its short term liabilities ($1.4B).

Long Term Liabilities: OTEX's short term assets ($2.2B) do not cover its long term liabilities ($4.1B).


Debt to Equity History and Analysis

Debt Level: OTEX's debt to equity ratio (87.5%) is considered high.

Reducing Debt: OTEX's debt to equity ratio has reduced from 107.9% to 87.5% over the past 5 years.

Debt Coverage: OTEX's debt is well covered by operating cash flow (24.4%).

Interest Coverage: OTEX's interest payments on its debt are well covered by EBIT (5.2x coverage).


Balance Sheet


Dividend

What is Open Text current dividend yield, its reliability and sustainability?

1.73%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: OTEX's dividend (1.73%) is higher than the bottom 25% of dividend payers in the US market (1.33%).

High Dividend: OTEX's dividend (1.73%) is low compared to the top 25% of dividend payers in the US market (3.6%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, OTEX has been paying a dividend for less than 10 years.

Growing Dividend: OTEX's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (68.2%), OTEX's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: OTEX's dividends in 3 years are forecast to be well covered by earnings (27.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.9yrs

Average management tenure


CEO

Mark Barrenechea (56 yo)

9.67yrs

Tenure

US$20,962,629

Compensation

Mr. Mark J. Barrenechea has been the Chief Executive Officer of OpenText Public Sector Solutions, Inc. and served as its President since January 2, 2012. He has been Chief Technology Officer at OpenText si...


CEO Compensation Analysis

Compensation vs Market: Mark's total compensation ($USD20.96M) is above average for companies of similar size in the US market ($USD11.36M).

Compensation vs Earnings: Mark's compensation has increased by more than 20% in the past year.


Leadership Team

Experienced Management: OTEX's management team is considered experienced (3.9 years average tenure).


Board Members

Experienced Board: OTEX's board of directors are seasoned and experienced ( 11.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: OTEX insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Open Text Corporation's employee growth, exchange listings and data sources


Key Information

  • Name: Open Text Corporation
  • Ticker: OTEX
  • Exchange: NasdaqGS
  • Founded: 1991
  • Industry: Application Software
  • Sector: Software
  • Market Cap: US$13.825b
  • Shares outstanding: 270.19m
  • Website: https://www.opentext.com

Number of Employees


Location

  • Open Text Corporation
  • 275 Frank Tompa Drive
  • Waterloo
  • Ontario
  • N2L 0A1
  • Canada

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/09/18 22:03
End of Day Share Price2021/09/17 00:00
Earnings2021/06/30
Annual Earnings2021/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.