Open Text Corporation (NASDAQ:OTEX) Stock Now Rated "Hold" by Sell-Side Analysts

Key Points

• Analysts give Open Text a consensus “Hold” rating: Nine of 12 covering firms rate the stock Hold, while three recommend Buy; the average 12-month price target is $30.72.
• Quarterly results beat estimates but showed mixed growth: EPS was $1.05 versus $0.94 expected, and revenue was $1.24 billion versus $1.22 billion expected, though revenue fell 4% year over year. Fiscal 2027 revenue guidance midpoint is below analyst consensus.
• Open Text declared a quarterly dividend of $0.28 per share, or $1.12 annualized, with a stated yield of about 4.5%.

Shares of Open Text Corporation (NASDAQ:OTEX - Get Free Report) TSE: OTC have been assigned a consensus rating of "Hold" from the twelve ratings firms that are presently covering the stock, MarketBeat reports. Nine analysts have rated the stock with a hold rating and three have assigned a buy rating to the company. The average 12 month price objective among brokers that have issued a report on the stock in the last year is $30.72.

OTEX has been the topic of several analyst reports. UBS Group boosted their price objective on Open Text from $25.00 to $27.00 and gave the stock a "neutral" rating in a research note on Friday, August 7th. Scotiabank decreased their target price on Open Text from $40.00 to $33.00 and set a "sector outperform" rating for the company in a research note on Friday, August 7th. Barclays boosted their price objective on shares of Open Text from $27.00 to $29.00 and gave the stock an "equal weight" rating in a research report on Friday. Raymond James Financial lowered Open Text from an "outperform" rating to a "market perform" rating and cut their price objective for the company from $35.00 to $29.50 in a research report on Thursday, August 6th. Finally, Zacks Research upgraded Open Text from a "strong sell" rating to a "hold" rating in a research report on Monday, October 5th.

Key Headlines Impacting Open Text

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.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently bought and sold shares of OTEX. The Manufacturers Life Insurance Company purchased a new position in shares of Open Text during the second quarter valued at approximately $266,599,000. Royal Bank of Canada increased its holdings in shares of Open Text by 10.9% in the first quarter. Royal Bank of Canada now owns 9,843,494 shares of the software maker's stock valued at $218,920,000 after purchasing an additional 965,385 shares during the last quarter. Letko Brosseau & Associates Inc. boosted its position in shares of Open Text by 0.3% in the 3rd quarter. Letko Brosseau & Associates Inc. now owns 8,866,816 shares of the software maker's stock valued at $199,289,000 after purchasing an additional 29,188 shares during the period. Dimensional Fund Advisors LP lifted its stake in shares of Open Text by 24.0% in the first quarter. Dimensional Fund Advisors LP now owns 4,142,610 shares of the software maker's stock valued at $92,120,000 after purchasing an additional 802,276 shares during the period. Finally, Cibc World Market Inc. purchased a new stake in Open Text in the 2nd quarter valued at about $70,939,000. 70.37% of the stock is currently owned by institutional investors.

Open Text Trading Down 4.9%

Shares of Open Text stock opened at $24.85 on Friday. The company has a debt-to-equity ratio of 1.43, a quick ratio of 0.81 and a current ratio of 0.81. The stock has a market cap of $6.00 billion, a PE ratio of 9.41 and a beta of 0.98. The firm has a 50-day moving average of $24.44 and a 200-day moving average of $23.84. Open Text has a 52-week low of $19.77 and a 52-week high of $35.65.

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

Open Text Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Friday, December 18th. Stockholders of record on Friday, December 4th will be given a $0.28 dividend. This represents a $1.12 dividend on an annualized basis and a dividend yield of 4.5%. The ex-dividend date of this dividend is Friday, December 4th. Open Text's dividend payout ratio (DPR) is 43.41%.

Open Text Company Profile

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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