Open Text trades at a forward price-to-earnings ratio of 4.9x with a PEG of 0.05, making it attractively valued relative to its earnings beat history and 162% free-cash-flow conversion rate, but a death-cross technical pattern and high implied volatility of 77% keep near-term risk elevated.
Thesis pillars
- Deep Value Fcf Conversion↓Deteriorating
- Earnings Beat Streak→Stable
- Piotroski Quality Signal→Stable
- +1 more pillar — see the Why tab for full reasoning
Pillars as of Jul 3, 2026, based on the 10-K filed Aug 6, 2026
Open Text Corporation (OTEX) Stock Analysis
Technology · Software - Application
Sell if holding. Analyst target reached at $27.13 — A.R:R is negative (-0.7) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Sector modifier (Technology): -0.8.
OpenText, a Canadian software company incorporated in 1991, sells enterprise data management software in seven categories, led by Content, plus business network, IT operations, cybersecurity, application delivery and analytics products. Revenue comes from cloud services and... Read more
Sell if holding. Analyst target reached at $27.13 — A.R:R is negative (-0.7) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Sector modifier (Technology): -0.8. Chart setup: No clear chart pattern; technical signals are mixed. Score 5.4/10, moderate confidence.
Passes 6/9 gates (positive momentum, clean insider activity, no SEC red flags, news events none recent, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio and earnings proximity 6d<=7d. Suitability: moderate.
About Open Text Corporation
About Open Text Corporation
OpenText groups its data management software into seven product categories, led by Content, and reports four revenue streams: cloud services and subscriptions, customer support, license, and professional service and other. The Canadian company, incorporated in 1991, divested eDOCS on January 12, 2026 and Vertica on May 11, 2026, businesses that comprised approximately 8% and 34% of the Analytics category in fiscal 2026. Cloud services and subscriptions was the largest driver of growth in fiscal 2026.
Cloud services and subscriptions cover software-as-a-service offerings, APIs and data services, and private cloud with managed services. Customer support is typically renewed annually and has historically been a significant portion of total revenue, while license revenue reflects software sales that often involve a significant implementation commitment. The client base spans Global 10,000 organizations, public sector agencies, mid-market companies, small and medium-sized businesses and direct consumers; the small-business cybersecurity portfolio is often sold through a global network of managed service providers. OpenText embeds its content products in SAP infrastructure, deploys on Google Cloud and Amazon Web Services, and is one of Microsoft's nine authorized Cloud Solutions Providers in the North American small-business market. Named competitors include IBM, Microsoft, Oracle and ServiceNow, with Microsoft also acting as a partner in certain markets.
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Platform and partner dependence frames the risk. The 10-K says OpenText depends on third-party cloud infrastructure and platform providers to host and deliver its cloud offerings, and that outages, repricing or discontinued services could impair availability and harm client relationships; its products also rely on infrastructure software such as operating systems, databases and middleware produced by Oracle, Microsoft and others. At the same time, large platform providers including Microsoft and ServiceNow are extending into enterprise AI and agentic workflows, so a partner may become a rival. The shift from perpetual licenses to subscriptions could add pricing pressure and change the timing of revenue recognition, which may weigh on margins if clients adopt cloud offerings more slowly than expected.
See also: Technology · Software - Application
From Open Text Corporation's most recent 10-K filing, extracted October 18, 2026.
Recent developments
updated 2026-10-29Recent Developments — Open Text Corporation
Latest news
- NEWS Open Text Corp. stock rises Wednesday, outperforms market - MarketWatch — MarketWatch positive
- NEWS Open Text Corp. stock rises Wednesday, outperforms market - marketwatch.com — marketwatch.com positive
- NEWS Guardian Partners Inc. Cuts Stock Position in Open Text Corporation $OTEX - MarketBeat — MarketBeat neutral
- NEWS Open Text Corp (OTEX) Institutional Confidence - TradingKey — TradingKey neutral
- NEWS Open Text Corp. stock outperforms market despite losses on the day - MarketWatch — MarketWatch positive
Generated 2026-10-29T11:48:40Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- MEDIUMProductContent product category10-K Item 1: 'OpenText Content is our largest product category'
- MEDIUMSupplierthird-party cloud infrastructure and platform providers10-K Item 1A: 'we depend on third-party cloud infrastructure and platform providers to host and deliver our cloud offerings'
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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Rating Breakdown
2 floor-breakers
Technicals below the gate floor. Component breakdown shows what dragged the score down.static
Growth below the gate floor. Component breakdown shows what dragged the score down.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Analyst target reached at $27.13 — A.R:R is negative (-0.7) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Sector modifier (Technology): -0.8. Chart setup: No clear chart pattern; technical signals are mixed. Prior stop was $25.49. Score 5.4/10, moderate confidence.
Analyst target $24.32 reached (−10.4% from $27.13); no take-profit level is published. Prior stop was $25.49. Stop-loss: $25.49.
Analyst target reached - limited upside remaining; Sector modifier (Technology): -0.8; Leverage penalty (D/E 1.5): -0.5.
Open Text Corporation trades at a P/E of 10.5 (forward 6.3). TrendMatrix value score: 8.0/10. Verdict: Sell.
9 analysts cover OTEX with a consensus score of 3.9/5. Average price target: $28.
What does Open Text Corporation do?OpenText, a Canadian software company incorporated in 1991, sells enterprise data management software in seven...
OpenText, a Canadian software company incorporated in 1991, sells enterprise data management software in seven categories, led by Content, plus business network, IT operations, cybersecurity, application delivery and analytics products. Revenue comes from cloud services and subscriptions, annual customer support, licenses, and professional services, sold to Global 10,000 enterprises, governments and small businesses via managed service providers. It divested Vertica and eDOCS in 2026.