NasdaqGS:OTEX

Stock Analysis Report

Executive Summary

Open Text Corporation provides a suite of software products and services.

Snowflake

Fundamentals

Adequate balance sheet with moderate growth potential.


Similar Companies

Share Price & News

How has Open Text's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

0.3%

NasdaqGS:OTEX

-1.0%

US Software

-1.6%

US Market


1 Year Return

-0.9%

NasdaqGS:OTEX

13.9%

US Software

-3.0%

US Market

OTEX underperformed the Software industry which returned 13.9% over the past year.

OTEX outperformed the Market in United States of America which returned -3% over the past year.


Share holder returns

OTEXIndustryMarket
7 Day0.3%-1.0%-1.6%
30 Day-12.2%-6.5%-5.8%
90 Day-4.7%1.6%0.2%
1 Year0.7%-0.9%15.5%13.9%-0.8%-3.0%
3 Year28.4%22.8%111.1%102.7%38.0%29.1%
5 Year47.9%37.2%156.5%137.9%50.8%34.1%

Price Volatility Vs. Market

How volatile is Open Text's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Open Text undervalued based on future cash flows and its price relative to the stock market?

16%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Open Text's share price is below the future cash flow value, but not at a moderate discount (< 20%).

Open Text's share price is below the future cash flow value, but not at a substantial discount (< 40%).


Price Based on Earnings

Open Text is good value based on earnings compared to the US Software industry average.

Open Text is overvalued based on earnings compared to the United States of America market.


Price Based on Expected Growth

Open Text is poor value based on expected growth next year.


Price Based on Value of Assets

Open Text is good value based on assets compared to the US Software industry average.


Next Steps

Future Growth

How is Open Text expected to perform in the next 1 to 3 years based on estimates from 10 analysts?

28.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Open Text's revenue is expected to grow by 3.1% yearly, however this is not considered high growth (20% yearly).

Open Text's earnings are expected to grow significantly at over 20% yearly.

Open Text's revenue growth is positive but not above the United States of America market average.

Open Text's earnings growth is expected to exceed the United States of America market average.

Open Text's earnings growth is expected to exceed the low risk savings rate of 2.7%.


Earnings per Share Growth Estimates


Future Return on Equity

Unable to establish if Open Text will efficiently use shareholders’ funds in the future without estimates of Return on Equity.


Next Steps

Past Performance

How has Open Text performed over the past 5 years?

2.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Open Text's year on year earnings growth rate has been positive over the past 5 years, however the most recent earnings are below average.

Open Text's 1-year earnings growth exceeds its 5-year average (17.9% vs 2.3%)

Open Text's earnings growth has not exceeded the US Software industry average in the past year (17.9% vs 39.3%).


Return on Equity

Open Text has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Open Text used its assets less efficiently than the US Software industry average last year based on Return on Assets.


Return on Capital Employed

Open Text's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Open Text's financial position?


Financial Position Analysis

Open Text is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Open Text's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

Open Text's level of debt (67.3%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has been reduced over the past 5 years (80.3% vs 67.3% today).

Debt is well covered by operating cash flow (33.5%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 4.6x coverage).


Balance Sheet

Low level of unsold assets.

Debt is not covered by short term assets, assets are 0.6x debt.


Next Steps

Dividend

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

2.02%

Expected Dividend Yield


Upcoming Dividend Payment

Purchase Open Text before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield and Payments Analysis

Open Text's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.52%).

Open Text's dividend is below the markets top 25% of dividend payers in United States of America (3.93%).

Whilst dividend payments have been stable, Open Text has been paying a dividend for less than 10 years.

Dividend payments have increased, but Open Text only paid a dividend in the past 6 years.


Current Payout to Shareholders

Dividends paid are covered by earnings (1.7x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be well covered by earnings (3.7x coverage).


Next Steps

Management

What is the CEO of Open Text's salary, the management and board of directors tenure and is there insider trading?

3.5yrs

Average management tenure


CEO

Mark Barrenechea (54yo)

7.6yrs

Tenure

US$8,099,674

Compensation

Mr. Mark J. Barrenechea has been the Chief Executive Officer and President of OpenText Public Sector Solutions, Inc. since January 2, 2012 and has been its Chief Technology Officer since January 4, 2016. M ...


CEO Compensation Analysis

Mark's remuneration is about average for companies of similar size in United States of America.

Mark's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

3.5yrs

Average Tenure

54yo

Average Age

The tenure for the Open Text management team is about average.


Board Age and Tenure

10.7yrs

Average Tenure

59yo

Average Age

The average tenure for the Open Text board of directors is over 10 years, this suggests they are a seasoned and experienced board.


Insider Trading

Open Text individual insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$36,80014 Jun 19
Savinay Berry
EntityIndividual
Shares904
Max PriceUS$40.71
SellUS$619,53213 Jun 19
Stephen Sadler
EntityIndividual
Role
Member of the Board of Directors
Non Independent Director
Shares15,000
Max PriceUS$41.30
SellUS$78,06122 May 19
Paul Duggan
EntityIndividual
Shares1,903
Max PriceUS$41.02
SellUS$809,57622 May 19
Simon Harrison
EntityIndividual
Role
Head of Sales
Executive Vice President of Worldwide Sales
Shares20,000
Max PriceUS$40.48
BuyUS$252,57121 May 19
Michael Slaunwhite
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares6,362
Max PriceUS$39.70
SellUS$57,34214 May 19
Paul Duggan
EntityIndividual
Shares1,430
Max PriceUS$40.10
BuyUS$347,30313 May 19
Michael Slaunwhite
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares8,638
Max PriceUS$40.23
SellUS$18,01013 May 19
Aditya Maheshwari
EntityIndividual
Role
Chief Accounting Officer
Senior VP & Chief Accounting Officer
Shares447
Max PriceUS$40.29
SellUS$105,32810 May 19
Christopher McGourlay
EntityIndividual
Shares2,640
Max PriceUS$39.90
SellUS$7,566,03208 Mar 19
Paul Jenkins
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares199,300
Max PriceUS$38.07
SellUS$379,68807 Mar 19
Randy Fowlie
EntityIndividual
Role
Lead Director
Lead Director
Shares10,000
Max PriceUS$37.97
SellUS$207,96728 Feb 19
Christopher McGourlay
EntityIndividual
Shares5,622
Max PriceUS$36.99
SellUS$197,36214 Feb 19
David Jamieson
EntityIndividual
Role
Chief Information Officer
Senior VP & Chief Information Officer
Shares5,353
Max PriceUS$36.87
SellUS$303,99507 Feb 19
David Jamieson
EntityIndividual
Role
Chief Information Officer
Senior VP & Chief Information Officer
Shares8,205
Max PriceUS$37.05
SellUS$677,23423 Nov 18
Gordon Davies
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares20,610
Max PriceUS$32.86
SellUS$164,69223 Nov 18
David Jamieson
EntityIndividual
Role
Chief Information Officer
Senior VP & Chief Information Officer
Shares5,012
Max PriceUS$32.86
SellUS$129,86123 Nov 18
Simon Harrison
EntityIndividual
Role
Head of Sales
Executive Vice President of Worldwide Sales
Shares3,952
Max PriceUS$32.86
SellUS$485,56523 Nov 18
Muhi Majzoub
EntityIndividual
Role
Senior Key Executive
Executive Vice President of Engineering
Shares14,777
Max PriceUS$32.86
SellUS$212,86423 Nov 18
Christopher McGourlay
EntityIndividual
Shares6,478
Max PriceUS$32.86
SellUS$3,341,58123 Nov 18
Mark Barrenechea
EntityIndividual
Role
Chief Executive Officer
Vice Chairman
Shares101,693
Max PriceUS$32.86
BuyUS$657,58009 Nov 18
Michael Slaunwhite
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares20,000
Max PriceUS$32.97
SellUS$7,532,52014 Sep 18
Paul Jenkins
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares199,868
Max PriceUS$38.46
SellUS$925,04212 Sep 18
Paul Jenkins
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares24,050
Max PriceUS$38.46
SellUS$196,73005 Sep 18
Randy Fowlie
EntityIndividual
Role
Lead Director
Lead Director
Shares5,000
Max PriceUS$39.35
SellUS$3,106,20404 Sep 18
Paul Jenkins
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares80,000
Max PriceUS$38.83
SellUS$17,081,47731 Aug 18
Paul Jenkins
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares437,381
Max PriceUS$39.47

Ownership Breakdown


Management Team

  • Mark Barrenechea (54yo)

    Vice Chairman

    • Tenure: 7.6yrs
    • Compensation: US$8.10m
  • Gordon Davies (57yo)

    Executive VP

    • Tenure: 9.9yrs
    • Compensation: US$2.51m
  • Madhu Ranganathan (54yo)

    Executive VP & CFO

    • Tenure: 1.3yrs
    • Compensation: US$2.12m
  • Patricia Nagle (54yo)

    Senior VP & Chief Marketing Officer

    • Tenure: 1.5yrs
  • Muhi Majzoub (59yo)

    Executive Vice President of Engineering

    • Tenure: 7.2yrs
    • Compensation: US$2.68m
  • Ted Harrison (49yo)

    Executive Vice President of Worldwide Sales

    • Tenure: 1.8yrs
    • Compensation: US$1.99m
  • David Jamieson (54yo)

    Senior VP & Chief Information Officer

    • Tenure: 4.8yrs
    • Compensation: US$1.62m
  • Aditya Maheshwari (44yo)

    Senior VP & Chief Accounting Officer

    • Tenure: 3.5yrs
  • Brian Sweeney (55yo)

    Senior VP & Chief Human Resources Officer

    • Tenure: 0.8yrs
  • Harry Blount

    Senior Vice President of Investor Relations

    • Tenure: 0.0yrs

Board Members

  • Mark Barrenechea (54yo)

    Vice Chairman

    • Tenure: 7.6yrs
    • Compensation: US$8.10m
  • Kate Stevenson (57yo)

    Independent Director

    • Tenure: 10.7yrs
    • Compensation: US$369.90k
  • Deborah Weinstein (59yo)

    Independent Director

    • Tenure: 9.7yrs
    • Compensation: US$382.80k
  • Gail Hamilton (69yo)

    Independent Director

    • Tenure: 12.7yrs
    • Compensation: US$358.52k
  • Stephen Sadler (68yo)

    Non Independent Director

    • Tenure: 21.9yrs
    • Compensation: US$984.16k
  • Randy Fowlie (59yo)

    Lead Director

    • Tenure: 0.0yrs
    • Compensation: US$393.81k
  • Michael Slaunwhite (58yo)

    Independent Director

    • Tenure: 21.4yrs
    • Compensation: US$389.91k
  • Carl Tinggren (61yo)

    Independent Director

    • Tenure: 2.5yrs
    • Compensation: US$329.92k
  • Tom Jenkins (60yo)

    Chairman of the Board

    • Tenure: 21.6yrs
    • Compensation: US$559.78k
  • Harmit Singh (56yo)

    Independent Director

    • Tenure: 0.9yrs
    • Compensation: US$351.32k

Company Information

Open Text Corporation's company bio, 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$10.383b
  • Shares outstanding: 269.21m
  • Website: https://www.opentext.com

Number of Employees


Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
OTEXNasdaqGS (Nasdaq Global Select)YesCommon SharesUSUSDJan 1996
OTEXTSX (The Toronto Stock Exchange)YesCommon SharesCACADJan 1996
OTXDB (Deutsche Boerse AG)YesCommon SharesDEEURJan 1996

Biography

Open Text Corporation provides a suite of software products and services. The company offers content services; business network, a cloud-based platform that facilitates collaboration and exchange of inform ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/08/24 23:44
End of Day Share Price2019/08/23 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


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.