Open Text (NASDAQ:OTEX) Shares Down 9.2% - Here's Why

Key Points

• Open Text shares fell 9.2% in mid-day trading to about $23.66 (low $23.73) on Wednesday, with roughly 1.38 million shares traded—about 34% below average—and trading well below its 50‑day ($30.79) and 200‑day ($33.41) moving averages.
• Although the company beat quarterly EPS estimates ($1.13 vs. $1.04) and declared a quarterly dividend of $0.275 (annualized yield ~4.5%), analysts maintain a consensus "Hold" rating with an average price target of $36.46 and several recent price‑target adjustments (e.g., CIBC to $37, UBS $26).

Open Text Corporation (NASDAQ:OTEX - Get Free Report) TSE: OTC was down 9.2% during mid-day trading on Wednesday . The company traded as low as $23.73 and last traded at $23.6550. Approximately 1,377,483 shares were traded during mid-day trading, a decline of 34% from the average daily volume of 2,075,177 shares. The stock had previously closed at $26.06.

Wall Street Analyst Weigh In

A number of research analysts recently issued reports on the company. Canadian Imperial Bank of Commerce reduced their price objective on Open Text from $40.00 to $37.00 and set a "neutral" rating for the company in a research report on Friday, January 16th. TD Securities upgraded shares of Open Text to a "hold" rating in a report on Monday, February 2nd. National Bankshares set a $45.00 price target on shares of Open Text and gave the company an "outperform" rating in a report on Thursday, October 23rd. Weiss Ratings reissued a "hold (c+)" rating on shares of Open Text in a research note on Monday, December 29th. Finally, UBS Group set a $26.00 price target on Open Text in a report on Friday, February 6th. Four investment analysts have rated the stock with a Buy rating and eleven have assigned a Hold rating to the stock. According to MarketBeat.com, Open Text has a consensus rating of "Hold" and an average price target of $36.46.

Open Text Stock Performance

The stock has a market capitalization of $6.11 billion, a price-to-earnings ratio of 14.27 and a beta of 1.08. The company has a quick ratio of 0.94, a current ratio of 0.94 and a debt-to-equity ratio of 1.57. The stock's 50-day simple moving average is $30.79 and its 200 day simple moving average is $33.41.

Open Text (NASDAQ:OTEX - Get Free Report) TSE: OTC last released its earnings results on Thursday, February 5th. The software maker reported $1.13 earnings per share 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 during the quarter, compared to the consensus estimate of $1.29 billion. During the same quarter in the previous year, the company posted $1.11 earnings per share. The firm's quarterly revenue was down .6% on a year-over-year basis. Analysts expect that Open Text Corporation will post 3.45 earnings per share for the current fiscal year.

Open Text Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Friday, March 20th. Investors of record on Friday, March 6th will be given a dividend of $0.275 per share. This represents a $1.10 dividend on an annualized basis and a yield of 4.5%. The ex-dividend date of this dividend is Friday, March 6th. Open Text's dividend payout ratio (DPR) is currently 64.71%.

Institutional Trading of Open Text

Several institutional investors and hedge funds have recently modified their holdings of OTEX. CIBC Private Wealth Group LLC bought a new stake in shares of Open Text during the third quarter worth about $33,000. Sagard Holdings Management Inc. bought a new stake in shares of Open Text in the 2nd quarter worth approximately $30,000. MAI Capital Management grew its stake in Open Text by 58.7% in the 2nd quarter. MAI Capital Management now owns 1,595 shares of the software maker's stock valued at $47,000 after buying an additional 590 shares in the last quarter. WealthCollab LLC grew its stake in Open Text by 39.5% during the second quarter. WealthCollab LLC now owns 1,640 shares of the software maker's stock valued at $48,000 after acquiring an additional 464 shares in the last quarter. Finally, Osaic Holdings Inc. boosted its position in shares of Open Text by 108.8% during the 2nd quarter. Osaic Holdings Inc. now owns 1,798 shares of the software maker's stock valued at $52,000 after acquiring an additional 937 shares during the last quarter. 70.37% of the stock is currently owned by institutional investors.

Open Text Company Profile

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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