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Open Text Corporation

OTEX
47
Software - Application · Technology
Price
$23.27
-0.15 (-0.64%)
Market Cap
$5.65B
Exchange
NASDAQ
Winston Score
47
Winston is serious
Mixed quality — meaningful strengths and weaknesses.

Share count falling — buybacks

−3.6% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 273.5M (2021) → 263.6M (2025)

Open Text Corporation engages in the designs, develops, markets, and sells information management software and solutions. It offers content services; business network that manages data within the organization and outside the firewall; security and protection solutions for defending against cyber threats, and preparing for business continuity and response in the event of a breach; digital investigation and forensic security solutions; OpenText security solutions to address information cyber resil

Winston Score History

Score breakdown

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Quality

Gross Margin
63.6%
Premium pricing power — 63.6% gross margin
Operating Margin
19.9%
Healthy — 19.9% operating margin
ROCE
2.6%
Weak — 2.6% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY
-3.4%
Shrinking sales (-3.4% YoY)
EPS YoY
-31.2%
Earnings shrinking (-31.2% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

EPS Consistency
2/8 quarters
Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion
234%
Turns 234% of profit into real cash
FCF Margin
16.8%
Converts sales into free cash efficiently (16.8%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity
1.62
Elevated debt (1.62)
Interest Cover
2.86x
Tight — interest eats into profit (2.9x)

Interest coverage between 1 and 3. Profits cover interest, but with little room to spare.

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Valuation

P/E Ratio (TTM)
13.7x
Attractive valuation — P/E 13.7

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward
+8.5
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (13.7 → 5.2)

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Dividends

Dividend Yield
4.90%
Healthy income — 4.90% yield

Generous yield. Worth checking whether the payout is sustainable.

Dividend Growth
+4.8%
Dividend growing modestly (4.8% YoY)

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