Open Text Corporation Common Shares (OTEX)

FairStock Score: 57/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a value investor, I start with business quality and the price paid. Open Text sells enterprise software for data management and AI, a sticky category with recurring cloud and subscription revenue. In fiscal 2026, the year ended 2026-06-30, it reported revenue of $5.2B, net income of $643.0M, and diluted EPS of $2.58. That beat fiscal 2025, when net income was $435.9M and EPS $1.65, but fiscal 2024 revenue was $5.8B, so the top line has not grown. At the 2026-10-13 close of $24.95, FairStock calculates a P/E of 9.67, a P/B of 1.48, and an EV/EBITDA of 6.08. The trailing free cash flow is $807.5M, a 13.4% FCF yield, and the dividend yield is 4.97%. That cash generation is attractive. The balance sheet is my main pause. Debt-to-equity is 1.49 and the Altman Z-Score is 0.76, which FairStock treats as a distress signal. ROCE is only 5.58%, while ROE is 16.19%, so leverage may be flattering returns. The Piotroski F-Score is 7/9, and the Graham Number is $31.02, giving a 19.57% margin of safety versus the close. The Lynch category is STALWART, based on steady five-year profit growth, yet recent profit growth is negative. Switching costs in enterprise data management can be a moat, but the modest revenue trend and negative profit growth suggest that moat is not currently producing expanding owner earnings. The 52-week range of $19.78 to $39.81 shows how sharply expectations have shifted. I would want revenue stabilization and debt reduction before trusting the cheapness.

In plain English: Open Text makes software that helps businesses manage, protect and use their data. The business still generates a lot of cash and pays a high dividend, but revenue and profit have recently weakened. At the recent share price of $24.95, the stock looks somewhat cheap compared with its reported earnings and accounting value, though the weak balance sheet makes that cheapness less certain.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q3 2026 10-Q (period ended 2026-03-31) · fiscal Q2 2026 10-Q (period ended 2025-12-31) · fiscal Q1 2026 10-Q (period ended 2025-09-30) · fiscal Q3 2025 10-Q (period ended 2025-03-31) · FY2026 10-K (period ended 2026-06-30) · FY2025 10-K (period ended 2025-06-30) · FY2024 10-K (period ended 2024-06-30)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer