Open Text Corp. (OTEX) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Open Text Corp.

Kinaxis, Inc.

The Descartes Systems Group, Inc.

BlackBerry Ltd.

Constellation Software, Inc.

Enghouse Systems Ltd.

Topicus.com, Inc.

Lumine Group, Inc.

Dye & Durham Ltd.

Lightspeed Commerce, Inc.

Docebo, Inc.

Why is Open Text Corp. ?

Healthy long term growth as Net Sales has grown by an annual rate of 10.41%

Positive results in Mar 26

OPERATING CASH FLOW(Y) Highest at CAD 1,350.73 MM
PRE-TAX PROFIT(Q) Highest at CAD 372.7 MM
RAW MATERIAL COST(Y) Fallen by -4.28% (YoY)

With ROE of 18.12%, it has a very attractive valuation with a 1.37 Price to Book Value

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -24.18%, its profits have fallen by -4.3% ; the PEG ratio of the company is 7.6

High Institutional Holdings at 90.73%

These investors have better capability and resources to analyse fundamentals of companies than most retail investors.
Their stake has increased by 10.27% over the previous quarter.

Real-Time Research Report

Verdict Report

How much should you buy?

Overall Portfolio exposure to Open Text Corp. should be less than 10%
Overall Portfolio exposure to Software Products should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Software Products)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Open Text Corp. for you?

High Risk, Low Return

Absolute

Risk Adjusted

Volatility

Open Text Corp.

-24.18%

-0.67

35.91%

S&P/TSX 60

29.6%

2.31

12.81%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

10.41%

EBIT Growth (5y)

9.92%

EBIT to Interest (avg)

3.32

Debt to EBITDA (avg)

3.50

Net Debt to Equity (avg)

1.25

Sales to Capital Employed (avg)

0.50

Tax Ratio

31.44%

Dividend Payout Ratio

63.21%

Pledged Shares

Institutional Holding

90.73%

ROCE (avg)

9.51%

ROE (avg)

11.36%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

1.37

EV to EBIT

9.27

EV to EBITDA

5.99

EV to Capital Employed

1.16

EV to Sales

2.03

PEG Ratio

7.57

Dividend Yield

ROCE (Latest)

12.56%

ROE (Latest)

18.12%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

RSI

No Signal

Bollinger Bands

Mildly Bearish

Bearish

Moving Averages

Bearish (Daily)

KST

Bearish

Mildly Bullish

Dow Theory

No Trend

Mildly Bearish

OBV

Mildly Bullish

No Trend

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

9What is working for the Company

OPERATING CASH FLOW(Y)

Highest at CAD 1,350.73 MM

PRE-TAX PROFIT(Q)

Highest at CAD 372.7 MM

RAW MATERIAL COST(Y)

Fallen by -4.28% (YoY

DEBT-EQUITY RATIO (HY)

Lowest at 130.13 %

NET PROFIT(Q)

Highest at CAD 310.85 MM

EPS(Q)

Highest at CAD 0.96

-3What is not working for the Company

DIVIDEND PAYOUT RATIO(Y)

Lowest at 39.23%

NET SALES(Q)

Lowest at CAD 1,759.22 MM

Here's what is working for Open Text Corp.

Pre-Tax Profit

Highest at CAD 372.7 MM and Grown

In each period in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is very positive

Pre-Tax Profit (CAD MM)

Operating Cash Flow

Highest at CAD 1,350.73 MM

in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (CAD MM)

Pre-Tax Profit

At CAD 372.7 MM has Grown at 54.71%

over average net sales of the previous four periods of CAD 240.9 MM

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (CAD MM)

Net Profit

Highest at CAD 310.85 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is positive

Net Profit (CAD MM)

EPS

Highest at CAD 0.96

in the last five periods

MOJO Watch

Increasing profitability; company has created higher earnings for shareholders

EPS (CAD)

Debt-Equity Ratio

Lowest at 130.13 %

in the last five Semi-Annual periods

MOJO Watch

The company has been reducing its borrowing as compared to equity capital

Debt-Equity Ratio

Raw Material Cost

Fallen by -4.28% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Here's what is not working for Open Text Corp.

Net Sales

Lowest at CAD 1,759.22 MM

in the last five periods

MOJO Watch

Near term sales trend is negative

Net Sales (CAD MM)

Dividend Payout Ratio

Lowest at 39.23%

in the last five years

MOJO Watch

Company is distributing lower proportion of profits generated as dividend

DPR (%)