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.

The Descartes Systems Group, Inc.

Enghouse Systems Ltd.

Constellation Software, Inc.

BlackBerry Ltd.

Kinaxis, Inc.

Lumine Group, Inc.

Topicus.com, Inc.

Lightspeed Commerce, Inc.

Dye & Durham Ltd.

Docebo, Inc.

Why is Open Text Corp. ?

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

The company has declared Positive results for the last 3 consecutive quarters

OPERATING CASH FLOW(Y) Highest at CAD 1,391.28 MM
ROCE(HY) Highest at 16.07%
DIVIDEND PER SHARE(HY) Highest at CAD 5.87

With ROE of 18.12%, it has a very attractive valuation with a 1.33 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 -17.89%, its profits have fallen by -4.3% ; the PEG ratio of the company is 7.3

High Institutional Holdings at 100%

These investors have better capability and resources to analyse fundamentals of companies than most retail investors.
Their stake has increased by 9.27% 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.

-37.95%

-0.38

37.68%

S&P/TSX 60

20.36%

2.51

12.02%

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)

2.89

Debt to EBITDA (avg)

3.31

Net Debt to Equity (avg)

1.25

Sales to Capital Employed (avg)

0.50

Tax Ratio

25.12%

Dividend Payout Ratio

63.21%

Pledged Shares

Institutional Holding

100.00%

ROCE (avg)

10.37%

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

1.33

EV to EBIT

9.11

EV to EBITDA

5.89

EV to Capital Employed

1.14

EV to Sales

1.99

PEG Ratio

7.33

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

13What is working for the Company

OPERATING CASH FLOW(Y)

Highest at CAD 1,391.28 MM

ROCE(HY)

Highest at 16.07%

DIVIDEND PER SHARE(HY)

Highest at CAD 5.87

PRE-TAX PROFIT(Q)

Highest at CAD 388.07 MM

RAW MATERIAL COST(Y)

Fallen by -5.86% (YoY

DEBT-EQUITY RATIO (HY)

Lowest at 124.95 %

NET SALES(Q)

Highest at CAD 1,867.57 MM

OPERATING PROFIT(Q)

Highest at CAD 670.82 MM

OPERATING PROFIT MARGIN(Q)

Highest at 35.92 %

-4What is not working for the Company

INTEREST(Q)

At CAD 150.23 MM has Grown at 39.68%

CASH AND EQV(HY)

Lowest at CAD 3,115.22 MM

DEBTORS TURNOVER RATIO(HY)

Lowest at 5.87 times

Here's what is working for Open Text Corp.

Pre-Tax Profit

Highest at CAD 388.07 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)

Dividend per share

Highest at CAD 5.87 and Grown

In each year in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (CAD)

Operating Cash Flow

Highest at CAD 1,391.28 MM

in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (CAD MM)

Net Sales

Highest at CAD 1,867.57 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (CAD MM)

Operating Profit

Highest at CAD 670.82 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is positive

Operating Profit (CAD MM)

Operating Profit Margin

Highest at 35.92 %

in the last five periods

MOJO Watch

Company's profit margin has improved

Operating Profit to Sales

Debt-Equity Ratio

Lowest at 124.95 %

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 -5.86% (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.

Interest

At CAD 150.23 MM has Grown at 39.68%

period on period (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (CAD MM)

Cash and Eqv

Lowest at CAD 3,115.22 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is deteriorating

Cash and Cash Equivalents

Debtors Turnover Ratio

Lowest at 5.87 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling Debtors has slowed

Debtors Turnover Ratio

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