TSE:OTEX

Open Text (OTEX.TO)

31.56
+1.28 (4.23%)
as of Jul 24, 2026, 8:00:00 pm Market Open.
500 watching
0
Investor Insights
star iconJul 24, 2026, 12:00 am

This summary was created by AI, based on 22 opinions in the last 12 months.

Open Text (OTEX) has received mixed reviews from experts, reflecting a split sentiment on its current market position. The company is seen as undervalued by some analysts due to its low price-to-earnings ratio and a consistent dividend yield. However, concerns regarding its organic growth, high debt levels, and management issues have led others to classify it as a 'value trap.' The recent performance has been hindered by broader market fears about AI impacting software companies, with ongoing management changes creating uncertainty. While some analysts suggest potential entry points for buying, the overall sentiment conveys caution, with predictions of further instability in the near term as existing competition and market trends shape the future trajectory of Open Text.

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Consensus
Caution
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Valuation
Undervalued
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CRM
TOP PICK
75% of its revenue is recurring. They're highly acquisitive, so they've compounded capital 20% a year for a long time. A long track record. It trades at 11x EBITDA vs. peers 15x. Their last quarter disappointed, but it's now a buying opportunity. For a tech company, it's also defensive: Fortune 500 companies buy their products. Will do well in this environment. (Analysts’ price target is $61.78)
HOLD
They are a large cap slow growth tech name. They make acquisitions. It is fine as a longer term hold. Slow and steady.
BUY ON WEAKNESS
The company is well run. He sees no reason to not buy more when the stock dips.
TOP PICK

It's trading near 52-week highs, though held back a little compared to its peers. This will change given their focus on the cloud and maybe an acqusition. They will grow around 5% organically. They will buy back a lot of stock. Their Google partnership in the cloud holds great potential. Trades at 11x EBITDA vs. 17x peers. (Analysts’ price target is $59.97)

BUY ON WEAKNESS
Sell CGI to buy OTEX? He watches it. OTEX is a leader in its field in Canada, but the stock is pricey. Buy in the mid-$40s. It reports on August 1.
BUY

Fine company. They buy companies to grow, paid by excess free cash flow. Low valuation, too. There's good growth; they just struck a partnership with Google.

BUY

Their partnership with Google and Mastercard He's followed this many years and once owned it. Their partnership with Google is excellent; Google is number three in the cloud space. This partnership may accelerate OTEX's organic growth which has traditionally been tepid and done through acqusitions. This trades at 14x earnings when the software space is much higher. He likes OTEX.

TOP PICK

They've done a really good job on recurring revenue.  Fantastic balance sheet.   Street consensus is BUY. Price target : $60.64

HOLD
If you bought it as a trade, you might want to take some profits. But technically, there's nothing he can point to that says sell it.
PAST TOP PICK
(A Top Pick May 29/18, Up 26%) They grow by acquisition. The CEO is a little off-putting, but he is brilliant and does a great job identifying targets.
STRONG BUY
Loves it and it is slightly undervalued. They continue to make a lot of money off software licensing. They sit on a lot of cash, but get into debt when they make acquisitions. A high-quality Canadian tech name, which are rare.
TOP PICK

An underloved Canadian software stock that is now focusing on the cloud, reducing lumpiness in their business. Trading at 11x EBITDA vs. peers at 17-18x. They close the valuation gap. (Analysts’ price target is $60.91)

SHORT
They have 2x debt-to-EBITDA. He's shorting the stock. It's pretty expensive, and their access to capital will decline since we are late in the cycle.
BUY ON WEAKNESS
Makes him mad that they don't own it. In the right place in the right time. They sell Enterprise information Management software. It allows the companies to digitize their processes. He would buy it in the high $30s
WAIT
Follows it very closely, but doesn't own it. Software for enterprise information management, and they're extremely good at it. Fabulous Canadian story. Clients all over the world. Well diversified. Recurring revenues. Gartner Research has it as one of the leaders. Double digit recurring growth. But it's expensive. He'd buy in mid-30s.
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