Open Text (NasdaqGS:OTEX) Could Be 14% Undervalued Following Strong Fiscal 2026 Results

Open Text (OTEX) is back in focus after reporting fourth quarter and full year fiscal 2026 results that featured higher revenue, sharply stronger net income, and fresh investment plans around AI, cloud, and sales capacity.

See our latest analysis for Open Text.

At a share price of $24.88, Open Text has seen a 1 month share price return of 10.73% and a 3 month share price return of 9.70%. However, the year to date share price return of 21.61% and 1 year total shareholder return of 16.67% indicate that longer term momentum has been weaker despite the recent earnings, dividend increase, and buyback announcements.

If Open Text's renewed focus on AI and cloud has your attention, it can be helpful to see what else is moving in related areas. Take a look at 55 AI infrastructure stocks

Open Text has a sizable global data and cloud business, along with fresh buyback and dividend support, yet the share price is still well below longer-term highs. So are investors getting a bargain or paying up too soon?

Most Popular Narrative: 14.2% Undervalued

Compared with Open Text's last close at $24.88, the most followed narrative anchors on a fair value of $29.00, built on detailed earnings and margin forecasts.

Accelerating customer demand for secure, cloud-based information management driven by surging global unstructured data volumes, increased adoption of sovereign cloud, and regulatory pressures continues to push new and existing clients towards OpenText's cloud-native and compliance-centric offerings, supporting higher recurring revenue growth and expanding forward backlog (RPO). Expanded integration of AI and automation capabilities (e.g., Titanium X and MyAviator platforms) directly into OpenText's cloud suite is leading to higher per-customer spend and driving pipeline conversion rates, expected to fuel both top-line revenue acceleration and incremental margin improvement.

Read the complete narrative.

Want to see what turns that AI and cloud story into a $29.00 fair value for Open Text? The narrative leans on a specific profit profile, a defined revenue path, and a tighter share count over time. The full breakdown shows exactly how those moving parts fit together into one valuation roadmap.

Result: Fair Value of $29.00 (UNDERVALUED)

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

However, the Open Text narrative also leans on some fragile assumptions, including managing declines in legacy maintenance revenue and executing restructuring and M&A plans without margin setbacks.

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

Next Steps

With mixed sentiment around Open Text's risks and rewards, it makes sense to look at the data yourself and move quickly while the story is fresh. To see both sides laid out clearly, review the 4 key rewards and 3 important warning signs

Looking for more investment ideas beyond Open Text?

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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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