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Investor Insights

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

Open Text (OTEX-T) is a software company showing mixed results in the past, with slow organic growth and a laggard performance in the market. However, recent acquisitions and the focus on cloud computing and AI are expected to lead to good long-term prospects. The company has a large user base with a strong recurring revenue stream. There is optimism about the potential for further upside in the stock, especially with the recent focus on AI and debt reduction through asset sales.

Consensus
Mixed
Valuation
Fair Value
Unspecified
Open Text

Management deserves more credit. They made their biggest acquisition in history in 2022 which caused the stock to plummet. However they have managed to turn it around as they had claimed they could and are now getting some revenue growth from the acquisition.They have also paid down $2 billion in debt so have a better balance sheet. trades at 11X earnings.

computer software / processing
DON'T BUY
Open Text

Is growing this year, but long term and compared to peers lacks growth in the software consolidation space.

computer software / processing
PAST TOP PICK
Open Text

(A Top Pick May 18/23, Down 4%)

Laggard in the market with disappointing results. Organic growth has been slow. Continues to own shares. Serial acquirer to create growth. Recent M&A starting to pay off. Earnings per share expected to rise. 150 million global users. A.I. products expected to increase. Good long term investment. 

computer software / processing
PAST TOP PICK
Open Text
(A Top Pick Jan 13/23, Up 30%)

Very strong business that has been proving itself. Recent weakness is share price has created major investment opportunity. Believes further upside in the stock. Debt levels coming down. Lots of opportunity going forward. Excellent vertical depth in business mode within sectors. 

computer software / processing
WEAK BUY
Open Text

It is in software which is a great sector. He owns a small amount but owns more of Constellation Software. Open Text has had mixed results over time but is inexpensive and the forecast is for good earnings growth over this year.

computer software / processing
PARTIAL BUY
Open Text
Does recent asset sale change his opinion?

No. The asset was more hardware, whereas OTEX is trying to skew more toward SaaS, AI, large-language models. Today's theme: you have to scale in, as the market is rich, mainly because the USD is so weak. Buy in thirds here, around $52.50, and just under $50. See his Top Picks.

(Analysts’ price target is $58.25)
computer software / processing
HOLD
Open Text

Has owned shares for a long time. Good for long term investors. Added shares in November. Stock performing well since fall. Expecting another acquisition. Not at low entry point. Consistent business. 

computer software / processing
BUY
Open Text
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

In Q1 FY2024 for OTEX, both revenue and EPS beat analysts’ estimates. Revenue came in at US$1.425B displayed year-over-year growth of 67% from $852M. Year-over-year growth in revenue was driven by Cloud revenues increasing 11% and annual recurring revenues increasing 59%. Adjusted EPS came in at $1.01, beating analysts’ estimates of $0.90. Net income was $81M compared to a net loss of ($117M) in the same period a year prior. This was a strong quarter for OTEX, with record quarterly revenue. 

OTEX recently divested AMC for US$2.275B to Rocket Software in an all-cash deal. OTEX has stated that the sale will allow the company to focus more on cloud computing and AI while cutting debt and having the ability to buy back shares in the future. The transaction is expected to close in Q4 of FY2024. Multiple banks upped price targets following this move. The focus on AI and cutting debt that the deal provides are two positives we like to see. Its valuation multiple has historically been held back because of its leverage. 
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computer software / processing
PAST TOP PICK
Open Text
(A Top Pick Dec 06/22, Up 46%)

OTEX were embracing AI before the AI explosion in Q2 this year. This was trading at great valuations in 2022, a rough year for tech. Will continue to lead in Canada in 2024.

computer software / processing
WEAK BUY
Open Text

Market likes that it spun off AMC, lowering debt. Getting pricey. Leader in content services. Supply chain analytics, AI solutions. Delivering. Stock has momentum.

(Analysts’ price target is $58.50)
computer software / processing
BUY
Open Text

Strong Canadian tech name. In TFSAs. Revenues growing, cloud exposure, starting to integrate AI. Reasonable valuation. Small company means stock price volatility. A name to consider for a 5 to 10-year time horizon.

computer software / processing
BUY
Open Text

Stock's recalibrated on slowdown in tech sector multiples. AI is going to be a game-changer, some industries will be impacted significantly, and it will fundamentally change this company. Likes it at these levels.

computer software / processing
PAST TOP PICK
Open Text
(A Top Pick Oct 11/22, Up 54%)

It is involved in the AI space and has been integrating it into their product solutions. It has done well with the tech bounce. He could see a further pullback before getting back into it.

computer software / processing
WAIT
Open Text

A good company and business model, fundamentally 8/10. Be cautious on valuation, wait for a healthier pullback. Risk/reward isn't there right now. Likes it in the long run. 

(Analysts’ price target is $59.00)
computer software / processing
BUY
Open Text

He bought then sold it (though missed the peak). Wants to rebuy it. They like their latest acquisition, and they grow by buying, not organically. They migrated well from licensing to cloud services, which will raise their PE over time. Trades at a great 12x PE.

computer software / processing
Showing 1 to 15 of 418 entries

Open Text(OTEX-T) Rating

Ranking : 5 out of 5

Bullish - Buy Signals / Votes : 17

Neutral - Hold Signals / Votes : 1

Bearish - Sell Signals / Votes : 2

Total Signals / Votes : 20

Stockchase rating for Open Text is calculated according to the stock experts' signals. A high score means experts mostly recommend to buy the stock while a low score means experts mostly recommend to sell the stock.

Open Text(OTEX-T) Frequently Asked Questions

What is Open Text stock symbol?

Open Text is a Canadian stock, trading under the symbol OTEX-T on the Toronto Stock Exchange (OTEX-CT). It is usually referred to as TSX:OTEX or OTEX-T

Is Open Text a buy or a sell?

In the last year, 20 stock analysts published opinions about OTEX-T. 17 analysts recommended to BUY the stock. 2 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for Open Text.

Is Open Text a good investment or a top pick?

Open Text was recommended as a Top Pick by on . Read the latest stock experts ratings for Open Text.

Why is Open Text stock dropping?

Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.

Is Open Text worth watching?

20 stock analysts on Stockchase covered Open Text In the last year. It is a trending stock that is worth watching.

What is Open Text stock price?

On 2024-03-19, Open Text (OTEX-T) stock closed at a price of $52.05.