Stock of the Day

June 2, 2020

Open Text (OTEX)

$23.84
-$1.09 (-4.4%)
Market Cap: $6.04B

About Open Text

Open Text Corporation provides information management software and solutions. The company offers content services, which includes content collaboration and intelligent capture to records management, collaboration, e-signatures, and archiving; and operates experience cloud platform that provides customer experience and web content management, digital asset management, customer analytics, AI and insights, e-discovery, digital fax, omnichannel communications, secure messaging, and voice of customer, as well as customer journey, testing, and segmentation. It also provides cybersecurity cloud solutions to protect, prevent, detect, respond and quickly recover from threats across endpoints, network, applications, IT infrastructure and data, AI-led threat intelligence; and to protect critical information and processes through threat intelligence, forensics, identity, encryption, and cloud-based application security. In addition, the company offers business network cloud for digital supply chains and secure e-commerce ecosystems including digitize and automate procure-to-pay and order-to-cash processes; IT operations management cloud for automation and advancement of IT support and asset management; and analytics & AI cloud solutions that offers artificial intelligence with practical usage to provide organizations with actionable insights and better automation, such as visualizations, advanced natural language processing and understanding, and integrated computer vision capabilities. In addition, it provides application automation cloud, developers cloud, and services. Further, it has strategic partnerships with SAP SE, Google Cloud, Amazon AWS, Microsoft Corporation, Oracle Corporation, Salesforce.com Corporation, DXC Technology Company, Accenture plc, Capgemini Technology Services SAS, Deloitte Consulting LLP, Hewlett Packard Enterprises, and Tata Consultancy Services. Open Text Corporation was incorporated in 1991 and is headquartered in Waterloo, Canada.

Today's Trend

OpenText Corporation (NASDAQ: OTEX; TSX: OTC) reported strong fiscal fourth-quarter results, but cautious forward guidance and mixed analyst actions are weighing on investor sentiment.

  • Fiscal Q4 EPS of $1.23 exceeded the $1.02 consensus estimate, while revenue of $1.33 billion topped expectations of $1.29 billion. Revenue increased 2.9% year over year, cloud revenue rose 6.0% to $503 million, and adjusted EBITDA increased 26.8%. OpenText Reports Fourth Quarter and Fiscal Year 2026 Financial Results
  • Scotia maintained a “sector outperform” rating and sees substantial potential upside, although it reduced its price target to $33 from $40. Citigroup also raised its target to $28 from $25, implying more modest upside, while retaining a “neutral” rating. Analyst Ratings
  • OpenText announced a quarterly dividend of $0.28 per share, representing an approximately 4.4% annualized yield. The dividend may support the stock’s appeal to income-focused investors.
  • The earnings presentation highlighted $1.96 billion in fiscal-year cloud revenue, up 5.5% year over year, suggesting continued cloud growth but relatively moderate overall expansion. OpenText Fiscal 2026 Q4 Results Presentation
  • Fiscal 2027 revenue guidance of $5.1 billion to $5.2 billion is below the $5.3 billion analyst consensus. First-quarter revenue guidance of $1.2 billion to $1.3 billion also trails the $1.3 billion consensus at the midpoint, raising concerns about near-term growth.
  • Raymond James downgraded OpenText from “outperform” to “market perform,” adding to pressure from Scotia’s sizable price-target reduction despite its continued bullish rating. Finviz Analyst Ratings
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