A Look at OpenText (NasdaqGS:OTEX) Valuation Following SAP S/4HANA Cloud Partnership Milestone

Open Text (NasdaqGS:OTEX) has reached a significant milestone with the certification of its Core Content Management platform for SAP S/4HANA Cloud Public Edition. This achievement officially establishes Open Text as an SAP Solution Extensions partner.

See our latest analysis for Open Text.

Open Text’s share price has seen a burst of momentum so far this year, with a 23% year-to-date gain and a 12% rise over the last 90 days, even after a recent 8% pullback this week. Behind the scenes, shareholder confidence has been reinforced by improved earnings, a confirmed dividend, ongoing buybacks, and now the SAP partnership. All of these factors are helping drive a one-year total shareholder return of 18% and a solid three-year gain of 29%. In the long run, the stock has lagged with a slightly negative five-year total return, but recent milestones and persistent growth signals suggest the outlook may be shifting.

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So after a strong surge in 2025 and new momentum from the SAP partnership, is Open Text actually undervalued relative to its fundamentals, or has the market already priced in the company’s next phase of growth?

Most Popular Narrative: 11.6% Undervalued

Open Text’s narrative fair value lands at $39.39, which is over 11% higher than the last close of $34.82. The market, hovering close to consensus, stands at a crossroads as new catalysts emerge.

There is growing recognition of Open Text as a potential artificial intelligence play. Forthcoming catalysts over the next six months are expected to drive renewed investor interest and position the company as a developing growth story.

Read the complete narrative.

Want to know the earnings assumptions behind this target? The narrative hinges on a ramp-up in profit margins and a surprising drop in valuation multiples. Explore why those forecasts could reset expectations for Open Text.

Result: Fair Value of $39.39 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, challenges remain, as delays in legacy business transitions or setbacks in key cloud and AI segments could pose risks to Open Text’s upbeat outlook.

Find out about the key risks to this Open Text narrative.

Build Your Own Open Text Narrative

If you see things differently or want to dig into the numbers yourself, shaping your own view is quick and straightforward. Do it your way

A great starting point for your Open Text research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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