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↑Improving
- Earnings Beat Streak→Stable
- Piotroski Quality Signal→Stable
- +1 more pillar — see the Why tab for full reasoning
Open Text Corporation (OTEX) Stock Analysis
Falling Knife setup
Technology · Software - Application
Sell if holding. At $23.06, A.R:R 0.9:1 is below the 1.5:1 minimum. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Thin upside margin: 5.5%; Sector modifier (Technology): -0.8.
OpenText is an Information Management company offering cloud subscriptions, software licenses and services across six business clouds -- Content, Cybersecurity, Business Network, DevOps, Observability and Service Management, and Analytics -- to Global 10,000 enterprises, SMBs,... Read more
Sell if holding. At $23.06, A.R:R 0.9:1 is below the 1.5:1 minimum. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Thin upside margin: 5.5%; Sector modifier (Technology): -0.8. Chart setup: Death cross, below all MAs, RSI 39, MACD bearish. Score 5.3/10, moderate confidence.
Passes 5/9 gates (clean insider activity, news events none recent, earnings proximity 52d clear, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum and favorable risk/reward ratio and death cross (50MA < 200MA). Suitability: speculative.
About Open Text Corporation
About Open Text Corporation
OpenText's Content Cloud generated 40% of total revenue for the year ended June 30, 2025, followed by Cybersecurity Cloud at 25%, with Business Network Cloud, DevOps Cloud, and Observability and Service Management Cloud each contributing 10% and Analytics Cloud 5%. The company completed its $6.2 billion acquisition of Micro Focus International in January 2023 and divested its Application Modernization and Connectivity business to Rocket Software for $2.275 billion in May 2024.
OpenText earns revenue from cloud subscriptions, term and perpetual software licenses, and professional and managed services across six business clouds -- Content, Cybersecurity, Business Network, DevOps, Observability and Service Management, and Analytics -- sold to Global 10,000 enterprises, SMBs, governments and consumers. Products integrate with third-party systems such as SAP S/4HANA, Salesforce and Microsoft Office 365, and the company delivers managed cloud services on partner infrastructure including Google Cloud Platform, Amazon Web Services and Microsoft Azure. OpenText serves SMB and consumer cybersecurity customers partly through a network of Managed Service Providers, while its direct sales force targets G10K accounts. The company continues to integrate the 2023 Micro Focus acquisition into its cloud and AI capabilities and has used acquisition and divestiture activity, including the 2024 AMC sale to Rocket Software, to reshape its portfolio and reduce debt by $2.0 billion.
Show full overview
OpenText's DevOps Cloud looks smaller today than its fiscal 2024 shape: the Application Modernization and Connectivity business that was sold to Rocket Software in May 2024 for $2.275 billion had made up approximately 45% of the DevOps Cloud the year before, meaning nearly half of that business cloud's revenue base was carved out in a single transaction. That kind of portfolio reshaping is occurring alongside leadership change -- in April 2026, Interim CEO James McGourlay transitioned to President, Chief Client Officer, with no successor CEO named in the filing, while President and Chief Customer Officer Paul Duggan stepped down to a Special Advisor role ahead of his July 2026 departure from the company.
See also: Technology · Software - Application
From Open Text Corporation's most recent 10-K filing, extracted September 6, 2026.
Recent developments
updated 2026-09-14Recent 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 2026-09-14T06:44:03Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- MEDIUMProductContent Cloud40%10-K Item 1: 'total revenues is comprised of 40% from Content Cloud, 25% from Cybersecurity Cloud'
- MEDIUMProductCybersecurity Cloud25%10-K Item 1: '40% from Content Cloud, 25% from Cybersecurity Cloud, 10% from Business Network Cloud'
Material Events(8-K, last 90d)
- 2026-04-20Item 5.02HIGHOn April 20, 2026, Interim CEO James McGourlay transitioned to President, Chief Client Officer; no successor CEO named in the filing. President and Chief Customer Officer Paul Duggan stepped down to Special Advisor and will leave OpenText entirely on July 1, 2026.SEC filing →
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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Rating Breakdown
2 floor-breakers·1 ceiling hit
Price action weak — below key moving averages, no momentum carry. Needs a base before trend-continuation setups apply.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. At $23.06, A.R:R 0.9:1 is below the 1.5:1 minimum. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Thin upside margin: 5.5%; Sector modifier (Technology): -0.8. Chart setup: Death cross, below all MAs, RSI 39, MACD bearish. Prior stop was $21.65. Score 5.3/10, moderate confidence.
Take-profit target: $24.32 (+5.5% upside). Prior stop was $21.65. Stop-loss: $21.65.
Thin upside margin: 5.5%; Sector modifier (Technology): -0.8; Leverage penalty (D/E 1.5): -0.5.
Open Text Corporation trades at a P/E of 8.9 (forward 5.4). TrendMatrix value score: 8.8/10. 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 is an Information Management company offering cloud subscriptions, software licenses and services across six...
OpenText is an Information Management company offering cloud subscriptions, software licenses and services across six business clouds -- Content, Cybersecurity, Business Network, DevOps, Observability and Service Management, and Analytics -- to Global 10,000 enterprises, SMBs, governments and consumers. Content Cloud generated 40% of total revenue and Cybersecurity Cloud 25% for the year ended June 30, 2025, following the company's $6.2 billion acquisition of Micro Focus International in January 2023 and its $2.275 billion divestiture of the Application Modernization and Connectivity business