Open Text (NASDAQ:OTEX) Stock Jumps 4.5% - What's Next?

Key Points

• Open Text shares rose 4.5% to about $25.27, although trading volume was 93% below the average daily level.
• Analyst sentiment remains cautious: the stock has a consensus “Hold” rating and a $30.95 average price target, with several firms recently lowering targets or ratings.
• The company reported better-than-expected quarterly earnings and revenue, while raising its quarterly dividend to $0.28, equivalent to a 4.5% annualized yield.

Shares of Open Text Corporation (NASDAQ:OTEX - Get Free Report) TSE: OTC traded up 4.5% during trading on Tuesday. The stock traded as high as $25.14 and last traded at $25.2680. 134,066 shares traded hands during trading, a decline of 93% from the average daily volume of 1,966,871 shares. The stock had previously closed at $24.18.

Analysts Set New Price Targets

Several research analysts have recently weighed in on OTEX shares. UBS Group upped their price objective on Open Text from $25.00 to $27.00 and gave the stock a "neutral" rating in a research report on Friday, August 7th. Zacks Research raised Open Text from a "strong sell" rating to a "hold" rating in a research report on Monday, October 5th. Weiss Ratings restated a "hold (c-)" rating on shares of Open Text in a report on Monday, September 21st. Scotiabank decreased their price target on Open Text from $40.00 to $33.00 and set a "sector outperform" rating on the stock in a research report on Friday, August 7th. Finally, Raymond James Financial cut Open Text from an "outperform" rating to a "market perform" rating and decreased their target price for the company from $35.00 to $29.50 in a research report on Thursday, August 6th. Three equities research analysts have rated the stock with a Buy rating and ten have given a Hold rating to the company's stock. According to data from MarketBeat.com, the company currently has a consensus rating of "Hold" and a consensus target price of $30.95.

Open Text Price Performance

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 company has a fifty day moving average of $23.79 and a 200 day moving average of $23.16. The firm has a market capitalization of $6.06 billion, a P/E ratio of 9.71 and a beta of 1.01.

Open Text (NASDAQ:OTEX - Get Free Report) TSE: OTC last posted its quarterly earnings data on Thursday, August 6th. The software maker reported $1.23 earnings per share for the quarter, topping the consensus estimate of $1.02 by $0.21. Open Text had a return on equity of 25.76% and a net margin of 12.26%. The firm had revenue of $1.33 billion during the quarter, compared to analyst estimates of $1.29 billion. During the same period last year, the company posted $0.97 EPS. The business's quarterly revenue was up 2.9% on a year-over-year basis. Sell-side analysts predict that Open Text Corporation will post 3.72 earnings per share for the current year.

Open Text Increases Dividend

The business also recently declared a quarterly dividend, which was paid on Friday, September 18th. Shareholders of record on Friday, September 4th were issued a $0.28 dividend. The ex-dividend date was Friday, September 4th. This is a positive change from Open Text's previous quarterly dividend of $0.2750. This represents a $1.12 dividend on an annualized basis and a yield of 4.5%. Open Text's dividend payout ratio is 43.41%.

Institutional Investors Weigh In On Open Text

Hedge funds and other institutional investors have recently modified their holdings of the company. Byrne Asset Management LLC boosted its position in shares of Open Text by 11.5% during the second quarter. Byrne Asset Management LLC now owns 4,837 shares of the software maker's stock valued at $107,000 after buying an additional 500 shares during the last quarter. Legacy Wealth Asset Management LLC raised its position in Open Text by 2.9% in the second quarter. Legacy Wealth Asset Management LLC now owns 21,435 shares of the software maker's stock worth $475,000 after acquiring an additional 595 shares during the period. PNC Financial Services Group Inc. lifted its stake in Open Text by 23.0% in the first quarter. PNC Financial Services Group Inc. now owns 4,117 shares of the software maker's stock valued at $92,000 after purchasing an additional 769 shares during the last quarter. Ridgewood Investments LLC lifted its position in shares of Open Text by 1.4% during the 3rd quarter. Ridgewood Investments LLC now owns 67,238 shares of the software maker's stock valued at $1,507,000 after buying an additional 936 shares during the last quarter. Finally, IMA Advisory Services Inc. boosted its position in Open Text by 3.3% during the first quarter. IMA Advisory Services Inc. now owns 32,771 shares of the software maker's stock worth $729,000 after purchasing an additional 1,054 shares during the period. Institutional investors own 70.37% of the company's stock.

Open Text Company Profile

OpenText Corporation NASDAQ: OTEX is a Canadian enterprise software company that provides information management solutions for organizations worldwide. Its products help businesses create, capture, manage, secure, exchange and analyze content and data across digital operations.

The company's portfolio includes enterprise content management, business process management, customer experience management, secure file transfer, cybersecurity, IT operations management, analytics and developer tools.

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