Open Text (NASDAQ:OTEX) Downgraded by Wall Street Zen to "Hold"

Key Points

• Wall Street Zen downgraded Open Text from “Buy” to “Hold.” Across analysts, the consensus is also “Hold,” with three Buy ratings and nine Hold ratings and an average price target of $30.72.
• Open Text beat quarterly estimates, reporting EPS of $1.05 versus $0.94 expected and revenue of $1.24 billion versus $1.22 billion expected. However, revenue fell 4% year over year, and fiscal 2027 revenue guidance came in slightly below consensus at its midpoint.
• Shares were quoted at $24.85, while Barclays raised its target from $27 to $29 but kept an “equal weight” rating.

Open Text (NASDAQ:OTEX - Get Free Report) TSE: OTC was downgraded by equities researchers at Wall Street Zen from a "buy" rating to a "hold" rating in a research note issued on Saturday, Wall Street Zen reports.

A number of other equities research analysts have also commented on the company. Scotia decreased their price objective on Open Text from $40.00 to $33.00 and set a "sector outperform" rating for the company in a research report on Friday, August 7th. Barclays raised their target price on Open Text from $27.00 to $29.00 and gave the stock an "equal weight" rating in a research note on Friday. Zacks Research upgraded shares of Open Text from a "strong sell" rating to a "hold" rating in a research report on Monday, October 5th. Weiss Ratings upgraded shares of Open Text from a "hold (c-)" rating to a "hold (c)" rating in a report on Wednesday, October 14th. Finally, UBS Group raised their price objective on shares of Open Text from $25.00 to $27.00 and gave the company a "neutral" rating in a research note on Friday, August 7th. Three research analysts have rated the stock with a Buy rating and nine have assigned a Hold rating to the company. According to data from MarketBeat, the company currently has a consensus rating of "Hold" and a consensus target price of $30.72.

Open Text Stock Down 4.9%

OTEX opened at $24.85 on Friday. The company has a fifty day moving average price of $24.44 and a 200-day moving average price of $23.84. The company has a debt-to-equity ratio of 1.43, a current ratio of 0.81 and a quick ratio of 0.81. The firm has a market capitalization of $6.00 billion, a P/E ratio of 9.41 and a beta of 0.98. Open Text has a one year low of $19.77 and a one year high of $35.65.

Open Text (NASDAQ:OTEX - Get Free Report) TSE: OTC last posted its quarterly earnings data on Thursday, November 5th. The software maker reported $1.05 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.94 by $0.11. The company had revenue of $1.24 billion during the quarter, compared to analysts' expectations of $1.22 billion. Open Text had a return on equity of 25.76% and a net margin of 12.26%. Open Text's revenue was down 4.0% compared to the same quarter last year. During the same quarter in the previous year, the business earned $1.05 EPS. Equities research analysts expect that Open Text will post 3.72 earnings per share for the current fiscal year.

Institutional Trading of Open Text

Several hedge funds have recently bought and sold shares of OTEX. The Manufacturers Life Insurance Company purchased a new position in Open Text during the 2nd quarter valued at about $266,599,000. Royal Bank of Canada lifted its holdings in Open Text by 10.9% in the 1st quarter. Royal Bank of Canada now owns 9,843,494 shares of the software maker's stock worth $218,920,000 after buying an additional 965,385 shares in the last quarter. Letko Brosseau & Associates Inc. grew its stake in shares of Open Text by 0.3% in the third quarter. Letko Brosseau & Associates Inc. now owns 8,866,816 shares of the software maker's stock worth $199,289,000 after purchasing an additional 29,188 shares in the last quarter. Dimensional Fund Advisors LP lifted its position in Open Text by 24.0% in the 1st quarter. Dimensional Fund Advisors LP now owns 4,142,610 shares of the software maker's stock worth $92,120,000 after buying an additional 802,276 shares in the last quarter. Finally, Cibc World Market Inc. acquired a new stake in shares of Open Text during the 2nd quarter worth approximately $70,939,000. Institutional investors own 70.37% of the company's stock.

Open Text News Roundup

Here are the key news stories impacting Open Text this week:

• Positive Sentiment: Open Text earned $1.05 per share, ahead of the $0.94 consensus, and revenue of $1.24 billion topped estimates of $1.22 billion. Core revenue grew 2% year over year, core cloud revenue rose 11%, and adjusted EBITDA margin was 35.8%. OpenText first-quarter fiscal 2027 results
• Positive Sentiment: Barclays raised its price target from $27 to $29, implying 16.6% upside from the cited share price. Its rating remains “equal weight,” however, signaling a broadly market-level view.
• Positive Sentiment: The company declared a quarterly dividend of $0.28 per share, equivalent to $1.12 annually and a stated yield of about 4.3%.
• Neutral Sentiment: Second-quarter revenue guidance of $1.3 billion is in line with analyst consensus.
• Negative Sentiment: Fiscal 2027 revenue guidance of $5.1 billion–$5.2 billion has a midpoint below the $5.2 billion consensus, a modest forecast shortfall that could temper the earnings beat.
• Negative Sentiment: Despite beating estimates, quarterly revenue declined 4% year over year, and EPS was unchanged from the same quarter last year. That weak growth comparison may limit the positive impact of the results.

About Open Text

OpenText Corporation is a Canadian enterprise software company that develops solutions for managing, securing and exchanging business information. Its offerings help organizations organize content, automate business processes, connect with customers and partners, and manage information across cloud, on-premises and hybrid environments.

The company's portfolio includes enterprise content management, business network and integration services, customer experience tools, cybersecurity and information governance solutions, and software for managing enterprise applications and information technology operations.

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