QualityDipStocks / Technology · IT services
Open Text OTEX
Outside our quality screen, so we don’t track its dips. It’s 31% below its 52-week high.
Outside our quality screen, trading well below our fair value estimate, 4% over its Market Value.
Worth knowing
- FCF yield 12%, top 6% of the 1145 we measure
- Share count down 9% in 2 years
From the data on this page, as of the last close. How we pick these
- Fair value est.
- $58.64+121%
- Market Value
- $25.52price +4%
- Off 52-wk high
- −31%
- Risk vs market
- Below marketbeta 0.82
5 bullish · 5 bearish See why
Repriced or dip?
Dip: business intact
The price is 31% below its 52-week high (Oct 31), but the business held up: revenue growth rate +11.9 pts, earnings per share +56.0%, free cash flow +17.5%.
Some numbers held up (revenue growth rate +11.9 pts, earnings per share +56.0%, free cash flow +17.5%), others slipped. The price is 31% below its 52-week high.
The price is 31% below its 52-week high, and the business changed too.
Within 10% of its 52-week high, so there is no dip to judge yet.
The evidence 10 numbers, high vs now
- Revenue, last 12 months$5.2B → $5.2B (+1.5%)held up
- Revenue growth rate−10.4% → +1.5% a year (+11.9 pts)held up
- Earnings per share, 12 months$1.65 → $2.58 (+56.0%)held up
- Free cash flow, 12 months$687M → $808M (+17.5%)held up
- Operating margin17.3% → 20.6% (+3.4 pts)held up
- Shares outstanding−5.4% (fewer shares, each owns more)held up
- Net cash (cash minus debt)+6.2% of market cap since the highheld up
- Stock vs its sector (Technology)stock −31%, sector median +6% since Oct 31changed
- Price fall vs business numbersprice −31%, revenue/EPS/FCF median +17% (shown, not scored)
- Valuation multipleP/FCF 14.7× at the high → 8.2× now (shown, not scored)
Business numbers as reported at the high (12 months to Jun 30, 2025) vs the latest filing (12 months to Jun 30, 2026). Each measure is scored from −1 (business changed) to +1 (business intact) and weighted: revenue, earnings per share, free cash flow, operating margin, revenue growth rate, share count, net cash and the move vs its sector. 60 or more reads as a dip, 40 or less as a repricing. Analyst estimates are not in our data, so they are not used. How to read it
Data-based read, not advice.
Priced in
How much growth the market assumed at the 52-week high, the low and today (a reverse DCF).
At the high ($38.35, Oct 31) the price assumed about 2%/yr free-cash-flow growth; at the low ($20.01, Jun 22) about −14%; today about −9%. The last 3 years delivered 7%/yr (free cash flow).
Dashed line: what the last 3 years delivered, 7%/yr (free cash flow)
| High | Low | Now | |
|---|---|---|---|
| Price | $38.35Oct 31 | $20.01Jun 22 | $26.52 |
| Implied growth | +2% | −14% | −9% |
| P/E | 23.2× | 9.6× | 10.3× |
| P/FCF | 14.7× | 6.1× | 8.2× |
| EV/Sales | 3.0× | 1.9× | 2.2× |
What this means: the higher the implied growth, the more the price already counts on. If today's number sits well below what the business has delivered, the market expects less than its track record.
How it’s computed
Reverse DCF: the same 10-year free-cash-flow model as our fair value estimate (9.5% discount rate, growth for years 1–5 fading to 3% by year 10, 3% after), solved for the growth that makes it equal the market value at each price. For the high and the low we use only the filings that were public on that day, so nothing from a later report leaks back. Market value = that close × diluted shares. P/E = market value / 12-month net income; Price / FCF = market value / 12-month free cash flow; EV / Sales = (market value + debt − cash) / 12-month revenue. Hidden when the share count moved over 20% (split, merger), free cash flow is negative, or the company reports in another currency.
Valuation
What we estimate it's worth, and how it ranks on value vs every stock we cover.
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 5.4% ±2 points. Bear = 10.5% and 3.4%; bull = 8.5% and 7.4% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price is below even the bear case.
Cyclical / peak cash flow — treat with care
What the price implies To be worth today’s price, OTEX’s free cash flow would need to shrink about 9% a year for five years; our estimate uses 5%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 31 to Nov 2, 252 sessions). Beta = how much OTEX moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Moves a bit less than the market, and its own price swings are 3.0× the S&P 500’s.
- Beta vs S&P 500
- 0.82
- Volatility
- 38% vs 13% SPY
- Correlation SPY
- 0.27
- Correlation QQQ
- 0.15
How it ranks
Where OTEX stands vs every one of the 1,996 stocks we cover that has the number. Longer bar = better.
Top quarter on 3 of 6 measures
- Discount to fair value estimate121% · price below our base caseTop 6%of 1,314
- Free cash flow yield12% · free cash flow vs market capTop 6%of 1,391
- Dividends + buybacks yield10% · cash paid out or used to retire shares, vs market capTop 6%of 1,836
- Revenue growth, last 12 months+1.5% · vs the 12 months beforeLowest 17%of 1,814
- Operating margin21% · of sales kept as operating profitTop 26%of 1,288
- Return on invested capital9.2% · profit per dollar of capitalLowest 44%of 838
From SEC filings and our fair value estimate model. A ranking, not advice.
Valuation details
DCF $58.64 · MV $25.52
Cyclical / peak cash flow — treat with care
Assumes 5.4% growth for 5 years (revenue grew 5.4% a year FY23–FY26), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $3.24 a share (fiscal year to Jun 30, 2026), from the 10-K filed Aug 6, 2026. Net debt $4.8B, not deducted.
Fundamentals
The business itself: sales, profits, cash and debt, from SEC filings.
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
ValuationFree-cash-flow yield of 12.2% (price / FCF 8.2×): $808M of free cash in the last 12 months.
ValuationOur DCF fair value estimate is $58.64, 121% above the price (cyclical or peak cash flow, so treat with care).
GrowthDiluted EPS grew 56% to $2.58 in FY2026.
ValuationP/E of 10.3× vs a 33.0× median for the 220 Technology companies we cover.
Cash returnsShare count down 6.0% in a year: $416M of buybacks over 12 months.
Top bearish points 5 of 5
Balance sheetNet debt of $4.8B, 73% of the market cap (Jun 30, 2026).
GrowthSales grew 1.5% over the last 12 months, below the 16% median for the 283 Technology companies we cover.
Balance sheetDebt / equity of 1.4×, above the 0.4× median for the 139 Technology companies we cover.
QualityDoesn’t pass our quality screen: no positive free cash flow; net debt 3.1× EBITDA (limit 3×).
RiskReports earnings Nov 5 (consensus EPS $0.87): results can move the price sharply and reset Market Value.
All fundamentals
P/E 10.3 · FCF yield 12.2% · ROE 16%
Valuation
- P/E
- 10.3×Technology median 33.0×
- Price / FCF
- 8.2×
- FCF yield
- 12.2%
- EV / EBITDA
- 7.5×
- Price / sales
- 1.26×
- Price / book
- 1.65×
- Market cap
- $6.6Bprice × diluted shares
- Enterprise value
- $11.4B
Growth
- Revenue, 12 months
- $5.2B
- Sales growth, 12 months
- +1.5%vs the 12 months before
- Sales growth, 3 yrs
- +5.4%/yrfrom FY2023
- Diluted EPS, 12 months
- $2.58
- EPS growth, last FY
- +56.4%
- Net income, 12 months
- $643M
- Net income growth
- +48%12 months vs before
Profitability
- Gross margin
- 73.7%
- Operating margin
- 20.6%
- Net margin
- 12.3%
- FCF margin
- 15.4%
- Return on equity
- 16%
- Return on invested capital
- 9%
Balance sheet
- Cash & short-term inv.
- $956M
- Total debt
- $5.8B
- Net cash
- −$4.8B
- Debt / equity
- 1.44×
- Interest coverage
- n/ainterest expense not tagged in SEC data
Cash flow & returns
- Free cash flow, 12 months
- $808M
- FCF growth, 12 months
- +17%
- Dividend yield
- 4.06%$268M paid
- Payout ratio
- 42%
- Buybacks, 12 months
- $416M6.3% of market cap
- Share count, 1 year
- −6.0%diluted shares vs a year ago
- Stock-based comp
- $81M
Trailing 12 months to Jun 30, 2026; balance sheet at Jun 30, 2026. From Open Text’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
The business
Sales +3%
- Gross margin77%
- Operating margin24%
- Return on invested capital11%
- Return on equity16%
- Sales growth (latest quarter vs year-ago quarter)+3%
- Net debt / EBITDA3.1×
Chart & levels
Where the price is vs its key levels and trends.
Key levels
Every level vs today’s $26.52
- 52-wk lowlowest close, 1 year$20.01−24.5%
- Market Valueavg paid since Oct 1$25.52−3.8%
- PriceMon Nov 2 close$26.52you are here
- 52-wk highhighest close, 1 year$38.35+44.6%
- Fair value est.base case$58.64+121.1%
Momentum & 52-week range
RSI 61 · 5 days −4.0%
Signals
Reversal signal setups, the public ledger and the next earnings date.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only run on companies that pass our quality screen.
Next report
Nov 5
- DateThu Nov 5, before the open
- Consensus EPS$0.87
- Year-ago EPS$1
- QuarterSep/2026
From Nasdaq’s earnings calendar. A report resets Market Value.
OTEX is outside our quality screen
One text when a published rule fires on one of the 332 quality companies we track: the ticker, the price, the stop and a link to the numbers. Nothing else.
Voices & buzz
Who is talking about it, and how it compares with peers.
Who’s talking about it
Notable investors, executives, analysts and public figures on Open Text in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 3, 1:01 PM ET.
Compare with peers
Closest in size in IT services
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.