Open Text (NASDAQ:OTEX) Sets New 1-Year Low - What's Next?

Key Points

• Open Text hit a new 52-week low, trading as low as $21.07 and last at about $20.85 after a roughly 3.5% decline.
• Several analysts have cut price targets (examples: CIBC to $37, Barclays to $30, UBS to $26), leaving a consensus rating of Hold and a consensus target of $35.75.
• The company beat the quarter (EPS $1.13 vs. $1.04 expected; revenue $1.32B vs. $1.29B) though revenue was down 0.6% year-over-year, and it pays a 5.3% annualized dividend (quarterly $0.275).

Open Text Corporation (NASDAQ:OTEX - Get Free Report) TSE: OTC shares reached a new 52-week low during trading on Thursday . The company traded as low as $21.07 and last traded at $20.8470, with a volume of 113443 shares changing hands. The stock had previously closed at $21.56.

Analyst Ratings Changes

A number of research firms recently commented on OTEX. Canadian Imperial Bank of Commerce decreased their price objective on Open Text from $40.00 to $37.00 and set a "neutral" rating on the stock in a report on Friday, January 16th. Barclays decreased their price objective on Open Text from $39.00 to $30.00 and set an "equal weight" rating on the stock in a report on Friday, February 6th. Royal Bank Of Canada decreased their price objective on Open Text from $33.00 to $30.00 and set a "sector perform" rating on the stock in a report on Friday, February 6th. UBS Group set a $26.00 price target on Open Text in a research note on Friday, February 6th. Finally, Weiss Ratings restated a "hold (c+)" rating on shares of Open Text in a research note on Monday, December 29th. Three investment analysts have rated the stock with a Buy rating and eleven have issued a Hold rating to the stock. Based on data from MarketBeat, Open Text presently has a consensus rating of "Hold" and a consensus target price of $35.75.

Open Text Stock Down 3.5%

The company has a debt-to-equity ratio of 1.57, a current ratio of 0.94 and a quick ratio of 0.94. The business has a 50 day simple moving average of $23.78 and a 200 day simple moving average of $30.88. The company has a market capitalization of $5.11 billion, a price-to-earnings ratio of 12.24 and a beta of 1.08.

Open Text (NASDAQ:OTEX - Get Free Report) TSE: OTC last released its quarterly earnings results on Thursday, February 5th. The software maker reported $1.13 EPS for the quarter, topping analysts' consensus estimates of $1.04 by $0.09. Open Text had a return on equity of 23.60% and a net margin of 8.42%.The company had revenue of $1.32 billion for the quarter, compared to analysts' expectations of $1.29 billion. During the same period in the prior year, the firm earned $1.11 earnings per share. The firm's revenue was down .6% compared to the same quarter last year. As a group, equities analysts predict that Open Text Corporation will post 3.45 earnings per share for the current fiscal year.

Open Text Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Friday, March 20th. Shareholders of record on Friday, March 6th were paid a dividend of $0.275 per share. This represents a $1.10 dividend on an annualized basis and a yield of 5.3%. The ex-dividend date was Friday, March 6th. Open Text's dividend payout ratio is 64.71%.

Institutional Trading of Open Text

Several hedge funds have recently modified their holdings of OTEX. Norges Bank acquired a new stake in shares of Open Text in the fourth quarter valued at $106,700,000. First Trust Advisors LP raised its stake in shares of Open Text by 27.3% in the fourth quarter. First Trust Advisors LP now owns 11,493,714 shares of the software maker's stock valued at $374,394,000 after acquiring an additional 2,466,264 shares in the last quarter. Connor Clark & Lunn Investment Management Ltd. raised its stake in shares of Open Text by 456.0% in the third quarter. Connor Clark & Lunn Investment Management Ltd. now owns 2,312,755 shares of the software maker's stock valued at $86,429,000 after acquiring an additional 1,896,755 shares in the last quarter. Morgan Stanley raised its stake in shares of Open Text by 76.8% in the fourth quarter. Morgan Stanley now owns 2,884,381 shares of the software maker's stock valued at $93,973,000 after acquiring an additional 1,253,405 shares in the last quarter. Finally, The Manufacturers Life Insurance Company raised its stake in shares of Open Text by 11.7% in the fourth quarter. The Manufacturers Life Insurance Company now owns 10,734,420 shares of the software maker's stock valued at $349,978,000 after acquiring an additional 1,122,320 shares in the last quarter. 70.37% of the stock is currently owned by institutional investors and hedge funds.

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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