Fact based stock research
Open Text (NasdaqGS:OTEX)

CA6837151068

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Open Text stock research in summary

opentext.com

ANALYSIS: With an Obermatt Combined Rank of 23 (worse than 77% compared with investment alternatives), Open Text (Application Software, Canada) shares have lower financial characteristics compared with similar stocks. Shares of Open Text are a good value (attractively priced) with a consolidated Value Rank of 100 (better than 100% of alternatives) but show below-average growth (Growth Rank of 3), and are riskily financed (Safety Rank of 21), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 23, is a sell recommendation based on Open Text's financial characteristics. As the company Open Text's key financial metrics exhibit good value (Obermatt Value Rank of 100) but low growth (Obermatt Growth Rank of 3) and risky financing practices (Obermatt Safety Rank of 21), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 100% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	100
Growth Rank	3
Safety Rank	21
Combined Rank	23

Country	Canada
Industry	Application Software
Index	Human Rights, SDG 13, SDG 2, SDG 3, SDG 4, SDG 5, NASDAQ, TSX Composite
Size class	X-Large

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Open Text

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	77	97	100	100
GROWTH
GROWTH	45	27	61	3
SAFETY
SAFETY	3	92	26	21
SENTIMENT
SENTIMENT	n/a	80	71	^new
360° VIEW
360° VIEW	n/a	99	93	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Open Text is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	77	97	100	100
GROWTH
GROWTH	45	27	61	3
SAFETY
SAFETY	3	92	26	21
COMBINED
COMBINED	27	95	85	23

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Open Text the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 100 (better than 100% compared with alternatives) for 2024, Open Text shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Open Text. Price-to-Sales is 80 which means that the stock price compared with what market professionals expect for future sales is lower than for 80% of comparable companies, indicating a good value for Open Text's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 95% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 72. Compared with other companies in the same industry, dividend yields of Open Text are expected to be higher than for 99% of all competitors (a Dividend Yield rank of 99). ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 100, is a buy recommendation based on Open Text's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Open Text based on its detailed value metrics. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	53	71	76	80
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	65	88	94	95
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	45	76	67	72
DIVIDEND YIELD
DIVIDEND YIELD	84	99	98	99
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	77	97	100	100

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Open Text; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 3 (better than 3% compared with alternatives), Open Text shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for Open Text. Sales Growth has a rank of 11, which means that currently professionals expect the company to grow less than 89% of its competitors. The same is valid for Profit Growth, with a rank of 10, and Capital Growth with 11. In addition, Stock Returns have a below market rank of 21, which means that the stock returns have recently been below 79% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 3, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	30	9	10	11
PROFIT GROWTH
PROFIT GROWTH	53	25	62	10
CAPITAL GROWTH
CAPITAL GROWTH	n/a	60	100	11
STOCK RETURNS
STOCK RETURNS	65	61	61	21
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	45	27	61	3

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Open Text.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 21 (better than 21% compared with alternatives), the company Open Text has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Open Text is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Open Text. Liquidity is at 63, meaning the company generates more profit to service its debt than 63% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 7, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 93% of its competitors. Leverage is also high at a rank of 25, which means that the company has an above-average debt-to-equity ratio. It has more debt than 75% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 21 (worse than 79% compared with alternatives), Open Text has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	16	41	22	25
REFINANCING
REFINANCING	20	71	7	7
LIQUIDITY
LIQUIDITY	45	88	72	63
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	3	92	26	21

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Open Text and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	75	95	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	34	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	69	84	^new
MARKET PULSE
MARKET PULSE	n/a	32	26	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	80	71	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Open Text.
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