📊 OTEX Key Takeaways
Is Open Text Corp. (OTEX) a Good Investment?
OpenText maintains strong operational margins (21.5%) and solid free cash flow generation ($380.7M), but faces significant headwinds including a 10.4% revenue decline YoY and elevated leverage (1.58x D/E). The below-1.0 current ratio and flat earnings trajectory warrant caution despite the company's profitability and cash generation capabilities.
Why Buy Open Text Corp. Stock? OTEX Key Strengths
- Exceptional gross margins (73.4%) demonstrate strong pricing power and operational efficiency
- Robust free cash flow generation ($380.7M, 14.6% margin) provides financial flexibility despite leverage
- Strong operating margins (21.5%) and substantial cash reserves ($1.3B) offer downside protection
OTEX Stock Risks: Open Text Corp. Investment Risks
- Significant revenue decline of 10.4% YoY indicates structural challenges or persistent market headwinds
- Elevated debt-to-equity ratio (1.58x) combined with declining revenue increases financial risk and limits strategic flexibility
- Current ratio below 1.0 (0.94x) suggests working capital constraints and potential liquidity stress despite adequate total cash
Key Metrics to Watch
- Revenue stabilization or growth resumption to reverse declining trend
- Debt reduction trajectory and management commitment to deleveraging amid revenue pressures
- Operating cash flow sustainability to ensure FCF generation continues during revenue transition period
Open Text Corp. (OTEX) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The current ratio below 1.0x warrants monitoring of short-term liquidity.
OTEX Profit Margin, ROE & Profitability Analysis
OTEX vs Technology Sector: How Open Text Corp. Compares
How Open Text Corp. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Open Text Corp. Stock Overvalued? OTEX Valuation Analysis 2026
Based on fundamental analysis, Open Text Corp. shows some fundamental concerns relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Open Text Corp. Balance Sheet: OTEX Debt, Cash & Liquidity
OTEX Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Open Text Corp.'s revenue has grown significantly by 70% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.56 reflects profitable operations.
OTEX Revenue Growth, EPS Growth & YoY Performance
OTEX Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q2 2026 | $1.3B | $168.1M | $0.66 |
| Q1 2026 | $1.3B | $84.4M | $0.32 |
| Q3 2025 | $1.3B | $92.8M | $0.35 |
| Q2 2025 | $1.3B | $37.7M | $0.14 |
| Q1 2025 | $1.3B | $80.9M | $0.30 |
| Q3 2024 | $1.2B | $57.6M | $0.21 |
| Q2 2024 | $897.4M | $37.7M | $0.14 |
| Q1 2024 | $852.0M | $80.9M | $0.30 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Open Text Corp. Dividends, Buybacks & Capital Allocation
OTEX SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Open Text Corp. (CIK: 0001002638)
📋 Recent SEC Filings
❓ Frequently Asked Questions about OTEX
What is the AI rating for OTEX?
Open Text Corp. (OTEX) has an AI rating of HOLD with 60% confidence, based on fundamental analysis of SEC EDGAR filings.
What are OTEX's key strengths?
Claude: Exceptional gross margins (73.4%) demonstrate strong pricing power and operational efficiency. Robust free cash flow generation ($380.7M, 14.6% margin) provides financial flexibility despite leverage.
What are the risks of investing in OTEX?
Claude: Significant revenue decline of 10.4% YoY indicates structural challenges or persistent market headwinds. Elevated debt-to-equity ratio (1.58x) combined with declining revenue increases financial risk and limits strategic flexibility.
What is OTEX's revenue and growth?
Open Text Corp. reported revenue of $2.6B.
Does OTEX pay dividends?
Open Text Corp. pays dividends, with $136.7M distributed to shareholders in the trailing twelve months.
Where can I find OTEX SEC filings?
Official SEC filings for Open Text Corp. (CIK: 0001002638) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is OTEX's EPS?
Open Text Corp. has a diluted EPS of $1.24.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is OTEX a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Open Text Corp. has a HOLD rating with 60% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is OTEX stock overvalued or undervalued?
Valuation metrics for OTEX: ROE of 7.8% (sector avg: 22%), net margin of 12.0% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
Should I buy OTEX stock in 2026?
Our dual AI analysis gives Open Text Corp. a combined HOLD rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is OTEX's free cash flow?
Open Text Corp.'s operating cash flow is $466.4M, with capital expenditures of $85.7M. FCF margin is 14.6%.
How does OTEX compare to other Technology stocks?
Vs Technology sector averages: Net margin 12.0% (avg: 18%), ROE 7.8% (avg: 22%), current ratio 0.94 (avg: 2.5).
Is Open Text Corp. carrying too much debt?
OTEX has a debt-to-equity ratio of 1.58x, which is above the Technology sector average of 0.5x. Combined with a current ratio below 1, this warrants careful monitoring of the balance sheet.