# Open Text Corporation (OTEX.TO) fundamentals

Data as of 2026-09-08. TSX, Canada. Sector: Technology / Software. Price C$33.12, market value C$8.0 billion.

## Valuation
- **P/E (trailing): 9.3×** (5-yr avg 35.1×, 3-yr avg 19.0×). Open Text Corporation trades at 9.3× trailing earnings, well below its own five-year average of 35.1×: cheap by its own standards. The Technology median in the September 2026 study was 32.1×. Forward P/E is 5.6×, lower than trailing, so analysts expect earnings to grow.
- **PEG: 0.11**. A PEG of 0.11 means the P/E is low relative to expected earnings growth: the market is not paying much for that growth.
- **Price / sales: 1.1×**. Each dollar of revenue is priced at 1.1×.
- **Price / book: 1.4×**. The shares trade at 1.4× book value; book value is a meaningful part of the valuation.
- **EV / EBITDA: 6.1×**. Enterprise value is 6.1× operating earnings before depreciation, the multiple that ignores how the company is financed; below 8× is inexpensive for most sectors.
- **Free-cash-flow yield: 13.8%** (5-yr avg 7.5%). Free cash flow equals 13.8% of the market value, above its five-year average of 7.5%, so the shares are cheaper on cash than they have usually been. Above 5% is generally attractive.
- **Earnings yield: 10.8%**. The inverse of the P/E: 10.8% of the price is earned each year.

## Profitability
- **Gross margin: 69.7%**. Open Text Corporation keeps 69.7% of revenue after the direct cost of what it sells, the kind of margin that comes with software, brands or pricing power.
- **Operating margin: 22.8%**. 22.8% of revenue is left after running the business, a healthy level in most sectors.
- **Net margin: 12.3%**. 12.3% of each dollar of sales reaches the bottom line.
- **Return on equity: 16.0%**. 16.0% on shareholders' equity is solid.
- **Return on invested capital: 9.8%**. Return on all capital, debt included, is 9.8%.
- **Return on assets: 4.9%**. Each dollar of assets produces 4.9% of profit.

## Growth
- **Revenue growth (1 yr): 1.5%** (3-yr 5.4%/yr, 5-yr 9.2%/yr). Revenue grew 1.5% over the last year, against 9.2% a year compounded over five years: growth is slowing.
- **EPS growth (1 yr): 52.7%** (3-yr 66.4%/yr, 5-yr 16.9%/yr). Earnings per share rose 52.7%, faster than revenue, so margins expanded or the share count shrank.
- **Free-cash-flow growth (3 yr): 7.2%/yr**. Free cash flow has compounded at 7.2% a year over three years, lagging earnings: check whether profits are turning into cash.

## Financial health
- **Debt to equity: 1.49**. Debt is 1.49 times equity, a leveraged balance sheet that needs steady cash flow to service.
- **Net debt / EBITDA: 2.8×**. It would take 2.8 years of operating earnings to repay net borrowings, within the comfortable range.
- **Interest coverage: 3.5×**. Operating profit covers interest 3.5× over, a safe margin.
- **Current ratio: 0.81** (quick 0.81). Current liabilities exceed current assets, so the company depends on ongoing cash generation or refinancing to pay the next year's bills.
- **Altman Z-score: 1.62**. A Z-score of 1.62 is in the distress zone, a signal to examine the balance sheet closely.
- **Piotroski F-score: 9/9**. 9 of 9 fundamental checks pass: strong and improving financials.

## Dividends
- **Dividend yield: 4.76%** (C$1.58 per share, trailing). Open Text Corporation yields 4.76%, an income-level yield.
- **Payout ratio: 42%** (33% of free cash flow). 42% of earnings goes out as dividends, leaving room to keep raising it.
- **Consecutive years of increases: 8**. 8 straight years of increases.
- **Dividend growth (5 yr): 9.3%/yr** (1-yr 6.7%). The dividend has grown 9.3% a year over five years.
- **Shareholder yield: 12.8%**. Dividends plus net buybacks return 12.8% of the market value a year.

## Price and momentum
- **Total return (1 yr): -25.6%** (YTD -24.2%, 3-mo 2.8%). The shares are down 25.6% over twelve months including dividends.
- **From 52-week high: -40.9%** (19.9% above the low). Trading 41% below its 52-week high, deep in a drawdown.
- **200-day average: below**. The price sits below its 200-day moving average, the usual definition of a downtrend.
- **RSI (14-day): 46**. An RSI of 46 is neutral.
- **Beta (1 yr): 0.78** (volatility 38%). Beta of 0.78 against the S&P/TSX Composite: the shares move roughly with the market.

Live score and charts: https://foliofundamentals.com/analyzer?s=OTEX.TO · Page: https://foliofundamentals.com/stocks/otex.to

Not investment advice.