Open Text (NASDAQ:OTEX) Cut to "Buy" at Wall Street Zen

Key Points

• Wall Street Zen lowered Open Text from a “strong-buy” to a “buy,” adding to a generally cautious analyst tone around the stock.
• Recent analyst activity has mostly included price target cuts, and MarketBeat says the stock now carries an average rating of “Hold” with an average target price of $33.67.
• Open Text reported better-than-expected quarterly results, with EPS of $1.01 versus a $0.94 estimate and revenue of $1.28 billion, while shares recently traded around $23.01.

Open Text (NASDAQ:OTEX - Get Free Report) TSE: OTC was downgraded by analysts at Wall Street Zen from a "strong-buy" rating to a "buy" rating in a research note issued to investors on Sunday.

Other equities research analysts have also recently issued research reports about the stock. National Bank Financial reduced their price objective on shares of Open Text from $45.00 to $33.00 and set an "outperform" rating on the stock in a research report on Wednesday, May 27th. Royal Bank Of Canada dropped their target price on shares of Open Text from $30.00 to $27.00 and set a "sector perform" rating for the company in a research report on Friday, May 8th. Citigroup cut their target price on shares of Open Text from $26.00 to $25.00 and set a "neutral" rating for the company in a research note on Friday, May 8th. Weiss Ratings reiterated a "hold (c-)" rating on shares of Open Text in a research note on Wednesday, June 24th. Finally, Scotiabank dropped their price objective on shares of Open Text from $50.00 to $40.00 and set a "sector outperform" rating for the company in a report on Friday, May 8th. Four investment analysts have rated the stock with a Buy rating and ten have assigned a Hold rating to the company. According to MarketBeat, the stock presently has an average rating of "Hold" and an average target price of $33.67.

Open Text Price Performance

Open Text stock traded up $0.04 during mid-day trading on Friday, hitting $23.01. The stock had a trading volume of 1,210,004 shares, compared to its average volume of 1,857,370. The firm has a market capitalization of $5.58 billion, a P/E ratio of 11.22 and a beta of 1.04. The company has a current ratio of 0.94, a quick ratio of 0.94 and a debt-to-equity ratio of 1.56. The firm's 50 day moving average is $22.76 and its 200 day moving average is $24.81. Open Text has a one year low of $19.77 and a one year high of $39.90.

Open Text (NASDAQ:OTEX - Get Free Report) TSE: OTC last issued its earnings results on Thursday, May 7th. The software maker reported $1.01 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.94 by $0.07. Open Text had a return on equity of 24.77% and a net margin of 9.91%.The company had revenue of $1.28 billion for the quarter, compared to the consensus estimate of $1.26 billion. During the same quarter last year, the company earned $0.82 EPS. The firm's quarterly revenue was up 2.2% on a year-over-year basis. On average, sell-side analysts forecast that Open Text will post 4.05 earnings per share for the current fiscal year.

Hedge Funds Weigh In On Open Text

Institutional investors and hedge funds have recently made changes to their positions in the business. Goldman Sachs Group Inc. lifted its holdings in shares of Open Text by 75.8% in the 1st quarter. Goldman Sachs Group Inc. now owns 1,437,335 shares of the software maker's stock valued at $36,307,000 after acquiring an additional 619,527 shares during the last quarter. United Services Automobile Association bought a new stake in Open Text during the first quarter worth approximately $213,000. EverSource Wealth Advisors LLC raised its position in Open Text by 39.7% during the second quarter. EverSource Wealth Advisors LLC now owns 2,005 shares of the software maker's stock valued at $59,000 after purchasing an additional 570 shares during the period. Cerity Partners LLC raised its position in Open Text by 3.4% during the second quarter. Cerity Partners LLC now owns 49,003 shares of the software maker's stock valued at $1,431,000 after purchasing an additional 1,612 shares during the period. Finally, Qube Research & Technologies Ltd lifted its stake in shares of Open Text by 16.8% in the 2nd quarter. Qube Research & Technologies Ltd now owns 46,500 shares of the software maker's stock valued at $1,360,000 after purchasing an additional 6,700 shares during the last quarter. 70.37% of the stock is owned by hedge funds and other institutional investors.

About Open Text

Open Text Corporation is a Canadian enterprise information management (EIM) software company that develops solutions for organizations seeking to manage, protect and extract insight from their unstructured and structured data. The company's platform encompasses document management, records management, digital asset management and archiving, enabling companies to govern information across its lifecycle.

Open Text's product suite includes content services, business process management, customer experience management, analytics and security products.

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