Open Text logged a -0.9% change during today's morning session, and is now trading at a price of $38.08 per share.
Open Text shares moved -10.7% over the last 52 weeks, with a high of $43.1 and a low of $24.91. During this time, the stock lagged the S&P 500 index by -2.0%. As of January 2022, the company's 50-day average price is $35.6. Open Text Corporation engages in the designs, develops, markets, and sells information management software and solutions. The large-cap Technology company has 14,400 full time employees and is based in Waterloo, Canada. Open Text has returned a 2.4% dividend yield over the last 12 months.
Snapshot of the Company's Consistent Operating Margins:
| 2019-06-30 | 2020-06-30 | 2021-06-30 | 2022-06-30 | |
|---|---|---|---|---|
| Revenue | $2,868,755 | $3,109,736 | $3,386,115 | $3,493,844 |
| Gross Margins | 67.6% | 67.7% | 69.4% | 69.6% |
| Operating Margins | 21.0% | 19.4% | 21.9% | 19.8% |
| Net Income | $285,501 | $234,225 | $310,672 | $397,090 |
| Net Margins | 9.95% | 7.53% | 9.17% | 11.37% |
| Earnings Per Share | $1.06 | $0.86 | $1.14 | $1.17 |
| Diluted Shares | 269,908 | 271,817 | 273,479 | 270,463 |
| Free Cash Flow | $812,441 | $881,827 | $812,445 | $888,701 |
| Capital Expenditures | -$63,837 | -$72,709 | -$63,675 | -$93,109 |
| Net Current Assets | -$2,487,977 | -$3,841,714 | -$3,307,823 | -$3,861,346 |
| Current Ratio | 1.54 | 1.25 | 1.62 | 1.56 |
| Long Term Debt | $2,604,878 | $3,584,311 | $3,578,859 | $4,209,567 |
| Net Debt / EBITDA | 1.54 | 2.14 | 1.5 | 2.02 |
Open Text Is Reasonably Valued:
Compared to the Technology sector's average of 27.16, Open Text has a trailing twelve month P/E ratio of 32.5 and, according to its EPS guidance of 5.91, an expected P/E ratio of 6.4.
Furthermore, Open Text is likely undervalued in terms of its equity because its P/B ratio is 2.5 compared to its sector average of 6.23. The company's shares are currently trading 98.5% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 1.06 * 15.435) = $19.19
Open Text Benefits From Positive Market Indicators:
3 analysts are following Open Text and have set target prices ranging from $49.57 to $63.16 per share. On average, they have given the company a rating of buy. At the current price of $38.08, OTEX is trading -33.0% away from its average analyst target price of $56.84 per share, implying an analyst consensus of strong upside potential for the stock.
The company has an average amount of shares sold short since 2.7% of the company's shares are tied to short positions. Institutions own 76.0% of Open Text's shares, while the insider ownership rate stands at 1.76%. The biggest shareholder is Jarislowsky, Fraser Ltd with a 6% stake in the company worth approximately $633,320,505.
