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TSE:OTEX

Open Text (OTEX.TO)

35.84
+2.02 (5.97%)
as of Oct 13, 2026, 3:29:39 pm Market Open.
500 watching
0
HOLD
Over 75K enterprise customers, 800K small to medium customers globally. Cloud business is approaching 50% of revenue. Historically, growth by acquisition. Down 35%. How will it be affected by macro headwinds, depth of recession? 9x earnings, organic revenue growth expectations 2-3% range. Cheaper than peers. Attractively valued. A comfortable hold.
TOP PICK
A valuation play. Shares have fallen 50% from 2021 highs. All negativity has been absorbed. They continue to expand cloud which sets it up well for 2023. Tech will be a winning category along with bonds in 2023. He targets $50 in 12-18 months. Attractive price now. (Analysts’ price target is $55.84)
BUY ON WEAKNESS
Company has navigated tech boom and bust. Tech infrastructure will remain in demand. Current dividend valuable. Valuation presenting good buying opportunity. Waiting for shares to fall further before buying.
BUY ON WEAKNESS
Great Canadian tech story. Doesn't own shares in company. Currently going through merger of A&D opportunity. Current tech selloff might be presenting good time to buy.
TOP PICK
More of a spec play, but pays a dividend over 3%. It has been unfairly beaten up this year. Their Google deal is a positive. Has decent fundamentals. Trades at only an 8.3x PE. He will enter this shortly. It's a valuation play. (Analysts’ price target is $61.40)
PAST TOP PICK
(A Top Pick Oct 05/21, Down 37%) It's down because it faces tough earnings comps. They did well during Covid--and still are--but aren't growing as fast. Also, they made a big purchase (they've made 80 over the past decade) of Microfocus, a large UK turnaround story. OTEX paid a lot for it and will finance it through debt and raise money in the high-yield market (at a rocky time). There's some worry over this deal, but he expects the deal to close and it will be very accretive.
WAIT
A fan. Safe and steady. Likes the verticalization. Big selloff from expensive valuation. Recent sizeable acquisition may take a while to digest, though management has a good track record. Stock may trade down further. He'd need to see progress on debt repayment.
COMMENT
Because of the volatility, a tradable security, not an investment. You could buy it down here. Recently named a leader in the Gartner magic quadrant. Double-digit growth rate, very strong balance sheet. (Analysts’ price target is $59.00)
BUY ON WEAKNESS
Likes company but would be hesitant to buy before market calms down. All tech names being sold off. If already own shares, continue to hold. Quality company that expects to do well in the future.
WATCH
It has 75 000 customers which is only 10% penetration of the software business. It also wants to increase its contact (has 40% right now) with more of the Global 10 000 companies. Its software offering is broader. Is an aquisitor. Would seriously consider buying. Regarding interest rates, he feels that the effect of rising rates is overblown. Even at 2, 3 or 4% rates are still at historical lows. These rates were normal in the late 1990's (4 1/2%) but the stock market was booming and was at a much higher valuation.
BUY
Added to their position 7 to 10 days ago. Software companies have been dragged down with tech. Sells to medium and large size businesses globally. Has compounded with 80 acquisitions over the decade. A good combination of growth and value at 12 to13 times earnings.
PARTIAL BUY
Develop and sell enterprise information management software. Price target of $61.75 USD. You could buy some here at $45, and some at 43. Use a stop of $40. Last week, Gartner Research named it as a leader in content services platforms. A quality name, he just doesn't have room for it. (Price targets refer to the NASDAQ listing in USD.)
HOLD
Believes company multiple is coming down due to interest rate increases. Owns the stock, but would not rush out to buy more stock.
BUY
Although it has not gone up as much as the high flyers, it has not gone down as much these days. Its growth has been by acquisition in the software management space. Very slow growth and there is a slow migration to on-going SAS recurring revenues. He loves their margins, however. It is trading in a fair range here. Unexciting, but a stable company.
BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The company continues to show solid and stable growth. Cash flow is strong and they are able to grow by acquisitions. It will probably not grow as quickly as before and it does have sizable debt. Unlock Premium - Try 5i Free

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