Open Text (OTEX) AI Stock Analysis

• Market Cap: $13.68B
• Dividend Yield: 2.75%
• Average Volume (3M): 974.16K
• Price to Earnings (P/E): 23.3
• Beta (1Y): 1.46
• Revenue Growth: -7.77%
• EPS Growth: -1.03%
• Country: CA
• Employees: 21,700
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 1.33
• Shares Outstanding: 254,316,700
• 10 Day Avg. Volume: 725,007
• 30 Day Avg. Volume: 974,156
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.30
• Enterprise Value/Revenue: 3.43
• Enterprise Value/Gross Profit: 4.75
• Enterprise Value/Ebitda: 11.82
• 1Y Price Target: $55.07
• Price Target Upside: 2.34% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 13

• Rating: 70 Neutral
• Price Target: C$60.00 ▲(11.50% Upside)

Open Text's overall stock score is driven by strong technical indicators and a positive earnings call outlook. While financial performance shows some challenges, the company's strategic focus on AI and cloud, along with solid profitability margins, supports a favorable stock position. Valuation is balanced by a decent dividend yield, making it an attractive option for investors seeking growth and income.

Positive Factors

Cloud Revenue Growth

The strong growth in cloud bookings indicates robust demand for Open Text's cloud services, supporting long-term revenue expansion and market position in the cloud sector.

Operational Efficiency

High EBITDA margins reflect strong operational efficiency, allowing Open Text to maintain profitability and reinvest in growth opportunities, enhancing competitive advantage.

Strategic Capital Return

Significant capital return through dividends and buybacks demonstrates financial strength and commitment to shareholder value, supporting investor confidence and long-term stability.

Negative Factors

Revenue Growth Challenges

Negative revenue growth indicates potential challenges in market expansion and competition, which could impact long-term business sustainability and profitability.

High Leverage

High leverage poses financial risk, potentially limiting flexibility in strategic investments and increasing vulnerability to economic downturns, affecting long-term financial health.

Cybersecurity Revenue Decline

Decline in cybersecurity revenue highlights challenges in a critical growth area, potentially impacting future revenue streams and competitive positioning in the cybersecurity market.

Open Text Business Overview & Revenue Model

Company Description

Open Text Corporation (OTEX) is a leading global enterprise information management (EIM) company headquartered in Waterloo, Ontario, Canada. The company operates in sectors including software development, cloud services, and enterprise solutions. Open Text provides a comprehensive suite of products and services that enable businesses to manage, secure, and leverage their digital information. Core offerings include content management, business process management, customer experience management, and cybersecurity solutions.

How the Company Makes Money

Open Text Corporation generates revenue primarily through the sale of software licenses, subscription services, and professional services. The company's revenue model includes upfront fees for traditional on-premises software licenses and recurring revenue from cloud-based subscriptions and managed services. Open Text also earns money from maintenance and support services, ensuring ongoing customer engagement and system updates. Professional services, including consulting, implementation, and training, provide additional revenue streams. Strategic partnerships and acquisitions also play a significant role in expanding the company's market reach and product offerings, contributing to its overall earnings.

Open Text Financial Statement Overview

Summary

Open Text's financial performance shows strengths in operational efficiency and cash generation, but faces challenges with revenue growth and high leverage. The company maintains solid profitability margins and cash flow ratios, crucial for sustaining operations in the competitive software industry.

Income Statement

Open Text's income statement reveals a mixed performance. The company has maintained a strong gross profit margin of over 70% in recent years, indicating effective cost management. However, the net profit margin has declined to 8.43% in 2025 from 11.37% in 2022, reflecting challenges in converting revenue into profit. The revenue growth rate has turned negative in 2025, suggesting a potential slowdown in business expansion. Despite these challenges, the EBIT and EBITDA margins remain healthy, showcasing operational efficiency.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio of 1.69 in 2025, indicating significant leverage which could pose financial risk if not managed properly. The return on equity has been relatively stable around 11%, suggesting consistent profitability relative to shareholder investment. The equity ratio stands at 28.5%, reflecting a moderate level of equity financing. Overall, the balance sheet highlights the need for careful debt management to maintain financial stability.

Cash Flow

Cash flow analysis indicates a decline in free cash flow growth, with a significant drop of 300.2% in 2025. The operating cash flow to net income ratio is 0.30, suggesting that cash generation from operations is not fully covering net income, which could impact liquidity. However, the free cash flow to net income ratio remains strong at 82.76%, indicating that the company is still generating substantial cash relative to its net income.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	5.17B	5.17B	5.77B	4.48B	3.49B	3.39B
Gross Profit	3.73B	3.73B	4.19B	3.17B	2.43B	2.35B
EBITDA	1.50B	1.50B	2.09B	1.26B	1.18B	1.33B
Net Income	435.87M	435.87M	465.09M	150.38M	397.09M	310.67M
Balance Sheet
Total Assets	13.77B	13.77B	14.21B	17.09B	10.18B	9.61B
Cash, Cash Equivalents and Short-Term Investments	1.16B	1.16B	1.28B	1.23B	1.69B	1.61B
Total Debt	6.64B	6.64B	6.69B	9.25B	4.47B	3.87B
Total Liabilities	9.84B	9.84B	10.01B	13.07B	6.15B	5.51B
Stockholders Equity	3.93B	3.93B	4.20B	4.02B	4.03B	4.10B
Cash Flow
Free Cash Flow	687.40M	687.40M	808.40M	655.37M	888.70M	812.45M
Operating Cash Flow	830.62M	830.62M	967.69M	779.21M	981.81M	876.12M
Investing Cash Flow	-153.51M	-153.51M	2.06B	-5.65B	-970.96M	-68.77M
Financing Cash Flow	-834.68M	-834.68M	-2.96B	4.40B	138.46M	-924.55M

Open Text Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 53.81
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:OTEX, the sentiment is Positive. The current price of 53.81 is below the 20-day moving average (MA) of 54.33, above the 50-day MA of 50.93, and above the 200-day MA of 41.45, indicating a neutral trend. The MACD of 0.84 indicates Positive momentum. The RSI at 53.92 is Neutral, neither overbought nor oversold. The STOCH value of 19.29 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:OTEX.

Open Text Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ENGH	―	$1.12B	14.97	12.56%	6.32%	0.03%	-10.21%
OTEX	―	$13.68B	23.33	10.73%	2.75%	-7.77%	-1.03%
KXS	―	C$5.08B	146.89	5.93%	―	15.81%	22.17%
DSG	―	C$10.64B	52.44	10.54%	―	15.63%	18.47%
DCBO	―	$1.00B	35.25	55.53%	―	18.51%	32.49%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
LSPD	―	C$2.22B	―	-36.64%	―	18.75%	-386.84%

Open Text Corporate Events

OpenText Appoints George Schindler to Board

On October 6, 2025, OpenText announced the appointment of George Schindler to its board of directors. Schindler, who previously served as President and CEO of CGI Inc., brings a wealth of experience in driving growth and creating shareholder value. His appointment is expected to enhance OpenText’s focus on its core Information Management for AI business, potentially strengthening its market position and offering valuable perspectives to the board.

The most recent analyst rating on (TSE:OTEX) stock is a Buy with a C$50.00 price target. To see the full list of analyst forecasts on Open Text stock, see the TSE:OTEX Stock Forecast page.

Open Text Divests eDOCS Solution to NetDocuments

On October 2, 2025, Open Text Corporation announced a definitive agreement to divest its eDOCS on-premise solution, part of its Analytics portfolio, to NetDocuments for $163 million in cash. This strategic move aligns with OpenText’s focus on its core business of secure information management for AI, aiming to enhance shareholder value and reduce outstanding debt. The transaction, expected to close by early 2026, will integrate the software, customer contracts, associated services, and employees into NetDocuments, supporting OpenText’s capital allocation framework and future revenue growth.

The most recent analyst rating on (TSE:OTEX) stock is a Hold with a C$40.00 price target. To see the full list of analyst forecasts on Open Text stock, see the TSE:OTEX Stock Forecast page.

OpenText Appoints Steve Rai as New CFO

On October 1, 2025, OpenText announced the appointment of Steve Rai as Executive Vice President and Chief Financial Officer, effective October 6, 2025. Rai, who has over 30 years of experience in global finance and a strong background in the technology industry, previously served as CFO of BlackBerry Limited. His appointment is expected to drive OpenText’s next phase of growth and strategic vision, especially in the age of AI. Interim CEO James McGourley expressed confidence in Rai’s leadership and expertise, while also thanking Cosmin Balota for his interim role as CFO.

The most recent analyst rating on (TSE:OTEX) stock is a Buy with a C$50.00 price target. To see the full list of analyst forecasts on Open Text stock, see the TSE:OTEX Stock Forecast page.

OpenText Earnings Call: Cloud Growth and Future Outlook

OpenText Corporation’s recent earnings call painted a balanced picture of the company’s current standing and future prospects. While the call highlighted strong growth in cloud services and a promising outlook for fiscal 2026, it also acknowledged challenges such as revenue declines in fiscal year 2025, cybersecurity issues, and broader economic headwinds. This duality in sentiment reflects both optimism and caution as the company navigates its path forward.

Open Text Appoints James McGourlay as Interim CEO

On August 11, 2025, Open Text Corporation announced a significant leadership transition with the appointment of James McGourlay as Interim CEO, following the departure of Mark J. Barrenechea. The company has also established an Executive Committee to support the transition and is actively searching for a new CEO. OpenText plans to continue exploring portfolio-shaping opportunities to enhance its core Information Management for AI business, aiming to drive long-term shareholder returns.

The most recent analyst rating on (TSE:OTEX) stock is a Hold with a C$31.00 price target. To see the full list of analyst forecasts on Open Text stock, see the TSE:OTEX Stock Forecast page.

OpenText Reports Strong Cloud Growth in FY2025

Open Text Corporation, a leader in Information Management software and services, has released its financial results for the fourth quarter and fiscal year 2025, highlighting a focus on cloud services, AI-driven platforms, and strategic capital allocation. The company reported $1.86 billion in cloud revenues, marking a 2.0% year-over-year growth, alongside a 5% increase in dividends and a new $300 million share repurchase program. Despite a 10.4% decline in total revenues to $5.168 billion, OpenText achieved a 32% surge in cloud bookings, driven by its AI-driven Titanium X platform, and returned a record $683 million to shareholders. The company also reported adjusted EBITDA of $1.784 billion, maintaining a margin of 34.5%, while investing in cloud, security, and AI sectors. Looking ahead, OpenText’s management is optimistic about growth opportunities in AI, cloud, and security, projecting a 3% to 4% increase in cloud revenue and a 1% to 2% rise in total revenue for fiscal 2026.

OpenText Announces Fiscal Year 2025 Financial Results

OpenText Corporation announced its financial results for the fiscal year ending June 30, 2025, reporting total revenues of $5.168 billion, a 10.4% decrease year-over-year. Despite the decline in total revenues, the company achieved a 2.0% growth in cloud revenues and a 5% increase in dividend per share for fiscal 2026. OpenText also introduced a $300 million share repurchase program and highlighted its strategic focus on AI, cloud, and security for future growth. The company returned a record $683 million to shareholders through dividends and share repurchases, demonstrating its commitment to shareholder value.

The most recent analyst rating on (TSE:OTEX) stock is a Hold with a C$31.00 price target. To see the full list of analyst forecasts on Open Text stock, see the TSE:OTEX Stock Forecast page.