Analyst Thanos Moschopoulos of BMO Capital maintained a Hold rating on Open Text (OTEX – Research Report), with a price target of $32.00.
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Thanos Moschopoulos has given his Hold rating due to a combination of factors surrounding Open Text’s recent performance and future outlook. While the company reported Q2/25 results that exceeded expectations, its guidance for Q3/25 fell short of consensus estimates, leading to a reduction in its full-year FY2025 forecast. This reduced guidance is significantly influenced by challenges within the ADM and ITOM product portfolios, which were acquired through the Micro Focus acquisition and contribute a notable portion of the company’s revenue.
Despite Open Text trading at a low valuation, Moschopoulos believes that improved organic growth is necessary for the stock to gain momentum. The company did achieve a beat in revenue and EBITDA, but the organic revenue decline and conservative guidance raise concerns. Additionally, the ADM and ITOM segments face headwinds, with a portion of the revenue guidance cut attributed to these areas. While Open Text has potential initiatives to spur growth in these segments, the lack of immediate catalysts keeps the stock at a Hold rating.
In another report released today, Barclays also maintained a Hold rating on the stock with a $36.00 price target.