Open Text Stock Analysis (NASDAQ:OTEX)

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$33.93 $0.07 (0.21%) OTEX stock closing price Mar 27, 2017 (Closing)
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Open Text
Updated on : Mar 27, 2017
previous close
OTEX 33.9 (0%)
NASDAQ 5840.4 (0%)
Closing Price On: Mar 27, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Computer-Software
Sector :
Computer and Technology
5 Quarter Revenue
Revenue Growth
2017-Q2
$million
%
YOY GROWTH
Compared to the industry
Operating Profit
Operating Margin:
18.6%
Sector Average:
2.7%
5 Quarter Net Profit
Net Margins
2017-Q2
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
2.4B
Debt/Equity Ratio:
 0.69
Compared to the industry
Cash Flow
Operating cash flow:
$107M
Net Income:
$45M
Dividend Yield
OTEX dividend yield:
1.36%
PROS      CONS
Operating Margins
Net Margins
Cash Flow
ROE
FCF Margin
High Debt Burden
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
OTEX PS :
4.3
Industry PS :
2.6
Sector:   Computer and Technology.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
6.7%
Return on Equity:
46%
Free Cash Flow Margin:
17.6%
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Open Text Analysis Video

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View Open Text stock analysis video. This is our OTEX analyst opinion covering the buy and sell arguments for OTEX stock.

Open Text Corp (USA) Stock Rating (4/5)

Our Open Text stock opinion is based on fundamentals of the company. This Open Text stock analysis is based on latest Q2 earnings for 2017. The stock price analysis takes into account a company's valuation metrics.

Should you buy OTEX stock?

  • Open Text's average operating margin of 18.6% was exceptional.
  • Net margins came in at average 56.8% for Open Text over the last twelve months.
  • The operating cash flow looks good at 2.4 times the net income.
  • Return On Equity (ROE) which is a measure of the company's profitability, looks great for Open Text at 46%.
  • Open Text has a healthy FCF (Free Cash Flow) margin of 17.6%.

Should you sell OTEX stock?

  • Open Text is debt laden and has a high debt/equity ratio of  0.69.
  • The company is trading at a price to sales multiple of 4.3, which is overvalued in comparison to the Computer-Software industry average multiple of 2.6.

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