Corporate Webpages Open Text Corporation
Open Text Corp. (OTEX) is what we like to characterize as one of
those "all things to all people" suite of software program
companies. A lot of it has to do with "cloud computing" where
this phrase means availability of seller's computer system for
supply of data and other information through the internet on demand.
OTEX is a Canadian company which often means a company gets
penalized in our evaluation system due to the unavailability of
certain information on U.S. companies such as insider trading
and non-standard reporting. However, this company, in our
opinion, has excellent management reporting meeting U.S. SEC
standards for U.S. corporation in most areas. It is traded on
both the NYSE and Toronto exchanges, with similar stock price after
adjustment for Candian Dollar exchange rate.
As of this writing, we just came past the worst down day in the
market in two years while this stock held up remarkably well.
It has high intrinsic value due to growth rate and use of its licensed
software by a large array of prestige clients.
Institutions are net acquirers. Chart patterns look weak to us,
so the company's strength is mainly in fundamentals. It has a
strong Zenith Index, although Jefferson Research rates its
balance sheet as weak. We think the fundamentals are strong.
The company is involved in a number of class action lawsuits but
they are aimed at the companies acquired by this company at
bargain prices, so that might be interpreted as supportive for management.
Like most computer software company websites, we think the
company's website is a bit vague as far as investors are
concerned about exactly what are its capabilities, described in
glowing but not too detailed terms. A number of research papers
dominate news items for this company where more information is
available if one cares to dig deeper.
(WAIT FOR PAGE TO LOAD COMPLETELY BEFORE LINKS WORK.)
Company Profile
Company History
News
Comparison with Peers
Bond Issue
Zenith Index
Financial Statements
Avg. P/E to Current P/E
Financial Ratios
Intrinsic Value (Disc. CashFlow)
Fair Value Estimator
Projected Earnings
Research Reports
Analysts' Opinions
Insider Activity
Institutional Activity
Sentiment
Short Interest
Standard & Poor's
Management's Discussion
Channel Potential
MACD Histogram
Intraday Chart
Val Idea
Stock Consultant
Point & Figure Chart
Wall Street Analyzer
Marketspace Chart
Time Series Forecast
Neural Network Prediction
Stock Options
Ultimate Trading Systems
Recommendation
Company Profile |
Company History |
News |
Comparison |
Similar Companies Performance:
Bond Issue |
Zenith Index |
Under current market conditions, a Zenith Index Score of 1.20 or above is required for a positive rating on this factor. 1.21 -1.30 is considered acceptable, 1.30-1.40 is considered strong and
> 1.40 is considered exceptionally strong. Accounting statements in this section often contain mistakes, especially in earlier years' totals, but data is deemed sufficient for us to give a rating. More accurate financial statements follow in the next section.
Open Text Corporation (OTEX) Exchange: Nasdaq 275 Frank Tompa Drive Waterloo, ON N2L 0A1 Sector: Technology Canada Industry: Software--Application Open Text Corporation provides a suite of software products and services. The company offers content services; business network, a cloud-based platform that facilitates collaboration and exchange of information inside and outside of organizations; artificial intelligence and analytics solutions; and OpenText EIM platform that provides multi-level, multi-role, and multi context security information platforms. OpenText also provides digital process automation, which enables organizations to transform into digital data-driven businesses through automation; Customer Experience Management, a set of processes used to track customer interactions throughout the customer journey; Magellan, an artificial intelligence (AI) and analytics platform that combines open source machine learning with advanced analysis and is able to merge, manage, and analyze both structured and unstructured, textual content; and Discovery suite that provides forensics and unstructured data analytics for searching, collecting, and investigating enterprise data to manage legal obligations and risk. In addition, the company offers customer support programs that include access to software upgrades, a knowledge base, discussions, product information, and an online mechanism to post and review trouble tickets. Further, it provides professional services, such as consulting and learning services relating to the implementation, training, and integration of its licensed product offerings into the customers' systems, as well as cloud services. The company serves organizations, enterprise companies, mid-market companies, and public sector agencies worldwide. It has strategic partnerships with SAP SE, Microsoft Corporation, Oracle Corporation, Salesforce.com Corporation, Accenture plc, Deloitte Consulting LLP, Tata Consultancy Services, ATOS, and Ernst & Young. The company was founded in 1991 and is headquartered in Waterloo, Canada. Last Trade: 47.29 52-Week Range: 47.85 - 37.01 Employees: 14,600 Avg.Volume: 401,988 Shares Corporate Governance: Pillar scores are Audit: 1; Board: 3; Shareholder Rights: 3; Compensation: 1. (A lower number means less governance risk.) EPS: 1.21 Dividend Amount: $ 0.70 Yield: 1.46% Ex-Dividend Date: Feb 26, 2020 Payout Ratio: 55.83 Key Statistics: Trailing P/E: 38.34 Target Price: 52.12 Qrtly Stock Price Growth (yoy): 24.19% Beta: 0.57 Qrtly S&P Index Growth (yoy): 4.90% Short Ratio: 11.71% Qrtly Revenue Growth (yoy): 52.00% Shares Out: 269920000 Qrtly Earnings Growth (yoy): 2.90% Book Value: 14.82 Debt/Equity: 95.00% Price/Book Value: 0.00 Operating Profit Margin: 21.39% Price/Sales: 0.00 Profit Margin: 11.13% Market Cap: 12,493,000,000 Return on Equity: 8.39% Enterprise Value: 0 Return on Assets: 4.55% Operating Cash Flow: 876,278 Free Cash Flow: 263,378 Annual Income Statement: (All numbers in thousands) Period Ending 6/30/2019 6/30/2018 6/30/2017 Total Revenue 2,868,755 2,815,241 2,291,057 Cost of Revenue 930,703 951,411 762,391 Gross Profit 1,938,052 1,863,830 1,528,666 Operating Expenses: Research & Development 321,836 323,461 281,680 Selling, General & Administrative 725,944 734,694 615,276 Total Operating Expenses 1,335,323 1,329,216 1,112,116 Operating Income or Loss 602,729 534,614 416,550 Income from Continuing Operations: Total Other Income/Expenses Net -25,563 -11,238 -47,875 Interest Expense 0 0 0 Income Before Taxes 440,574 386,126 249,551 Income Tax Expense 154,937 143,826 -776,364 Net Income from Continuing Op.s 285,637 242,300 1,025,915 Non-recurring Events: Extraordinary Items 136 76 256 Net Income 285,501 242,224 1,025,659 Net Income Avail to Common Shares 285,501 242,224 1,025,659 Annual Cash Flow Statement: (All numbers in thousands) Period Ending 6/30/2019 6/30/2018 6/30/2017 Net Income 285,637 242,300 1,025,915 Operating Activities: Depreciation 470,928 456,929 345,715 Changes in Accounts Recv'bls 75,508 -22,566 -126,784 Changes in Liabilities 812,441 604,567 359,661 Changes in Inventories 0 0 0 Changes in other Oper'g Acts 40,794 -114,883 -102,058 Total Cash Flow f Operations 876,278 709,885 439,253 Investing Activities: Capital Exenditures -63,837 -105,318 -79,592 Investments -383,723 -321,089 -2,114,790 Other Cash Flows fr Investing -16,966 -18,034 -5,937 Total Cash Flows from Investing -464,526 -444,441 -2,190,964 Financing Activities: Dividends Paid -168,859 -145,613 -120,581 Sale of Purchase of Stock -26,499 -26,499 577,724 Other Cash Flows fr Financing -905 -4,375 -5,937 Total Cash Flows from Financing -148,374 -23,673 909,544 Change in Cash & Cash Equiv. 259,552 239,585 -840,400 Annual Balance Sheets: (All Numbers in Thousands) Period Ending 6/30/2019 6/30/2018 6/30/2017 Current Assets: Cash & Cash Equivalents 682,942 443,357 1,283,757 Short Term Investments 0 0 11,839 Net Receivables 487,956 445,812 285,904 Inventory 0 0 0 Other Current Assets 0 0 0 Total Current Assets 1,327,580 1,003,477 1,672,273 Long-Term Investments 588,301 458,461 367,094 Property, Plant & Equipt 264,205 227,418 183,660 Goodwill 3,580,129 3,416,749 2,325,586 Intangible Assets 1,296,637 1,472,542 646,240 Other Assets 111,267 93,763 10,715 Total Assets 7,765,029 7,480,562 5,154,144 Current Liabilities: Accounts Payable 41,722 43,699 35,804 Current Portion LT Debt 251,713 282,257 214,647 Other Current Liabilities 0 0 1,890 Total Current Liabilities 994,599 1,127,043 671,029 Long Term Debt 2,610,523 2,387,057 2,137,987 Other Liabilities 0 94,724 79,231 Total Liabilities 4,047,771 3,947,243 3,174,947 Stockholder Equity: Common Stock 1,707,073 1,439,850 817,788 Retained Earnings 1,994,235 1,897,624 992,546 Capital Surplus 33,645 48,800 46,310 Total Stockholder Equity 3,716,221 3,532,358 1,978,656 Open Text Corporation (OTEX) [Indices near +3.0, near zero, or < zero bear special attention.] P/E Ratio Tests: P/E Ratio < 28? 0.7303 P/E Ratio > 5? 1.0000 P/E Ratio Vs Growth Rate: 3.0000 Forward P/E Ratio < 28? 0.0000 Price/Sales Ratio < 2.3? 1.0000 Inventory/Sales < 5%? 1.0000 Sales < $1 Billion? 0.3486 Operating Margin < 7.5%? 0.3506 Balance Sheet Tests: Debt/Equity < 0.40? 0.4211 Long-Term Debt Service: 1.4240 LTD Being Reduced? -3.0000 Short-Term Debt Service: 3.0000 Current Ratio > 2? 0.6674 Working Capital >= 1.5? 1.1388 Leverage Ratio < 20%? 0.1017 Debt/Assets < 1? 2.9745 Quick Ratio > 1? 3.0000 Inventory Turnover > 1? 1.0000 Share Equity Increase: 2.8373 Market Cap.< 1.5 Billion? 0.1201 Intangibles < 3% Assets? 0.0478 Income Tests: Profit Margin < 7.5%? 1.4840 EPS Annual Growth > 10%? 0.0848 Dividend Yield > 2.0%? 1.3699 EPS 3-yr Growth > 15? 0.5389 Enterprise Value/Revenue 3.0000 EPS Growth Consistent? 0.0000 Enterprise Value/EBITDA: 3.0000 Collection < 45 days? 0.7248 EPS Qrtly Growth > 10%? 0.0345 Gross Pft/Cur. LTD > 1? 3.0000 Borrowing Int. Rate < 6%? 3.0000 Stock Performance Tests: Volatility > 25%? 0.9062 % Held by Insiders < 5%? 2.8571 Beta > 1.25? 0.4560 % Held by Institut. < 50? 0.6813 50 Da MA > 200 Da MA? 0.2499 % Held by Institut. > 30? 2.4463 52-Wk Change vs. S&P 500: 0.4652 Short Ratio > 5? 2.3420 Price/Book Value < 3? 3.0000 Short % of Float > 20? 0.0930 Return on Assets > 17%? 0.2676 Average Volume > 100,000? 3.0000 Cash Flow Tests: Oper. C.F. > Lever'd C.F: 3.0000 Positive Free Cash Flow? 3.0000 Positive Oper. Cash Flow? 3.0000 Price to C.F.Ratio < 14?: 1.6688 Cash Flow / Assets > 10%? 1.9178 OTEX Open Text Corporation Overall Zenith Index: 1.3629
Financial Statements |
OPEN TEXT CORP (OTEX) INCOME STATEMENT Fiscal year ends in June. USD in thousands ex 2015-06 2016-06 2017-06 2018-06 2019-06 TTM Revenue 1,851,917 1,824,228 2,291,057 2,815,241 2,868,755 2,934,812 Cost of revenue 601,785 574,000 762,391 951,411 930,703 937,261 Gross profit 1,250,132 1,250,228 1,528,666 1,863,830 1,938,052 1,997,551 Operating expenses Research and development 196,491 194,057 281,680 323,461 321,836 330,074 Sales, General and administrative 532,962 484,632 615,276 734,694 725,944 748,505 Restructuring, merger and acquisition 19,034 26,354 49,425 22,445 34,736 15,736 Other operating expenses 140,111 141,776 165,735 248,616 252,807 273,931 Total operating expenses 888,598 846,819 1,112,116 1,329,216 1,335,323 1,368,246 Operating income 361,534 403,409 416,550 534,614 602,729 629,305 Other income (expense) -95,490 -112,632 -166,999 -148,488 -162,155 -143,792 Income before taxes 266,044 290,777 249,551 386,126 440,574 485,513 Provision for income taxes 31,638 6,282 -776,364 143,826 154,937 158,760 Net income from continuing operations 234,406 284,495 1,025,915 242,300 285,637 326,753 Other -79 -18 -256 -76 -136 -140 Net income 234,327 284,477 1,025,659 242,224 285,501 326,613 Net income available to common shareholders 234,327 284,477 1,025,659 242,224 285,501 326,613 Earnings per share Basic 0.96 1.17 4.04 0.91 1.06 1.21 Diluted 0.95 1.17 4.01 0.91 1.06 1.21 Weighted average shares outstanding Basic 244,184 242,926 253,879 266,085 268,784 269,762 Diluted 245,914 244,076 255,805 267,492 269,908 270,874 ____________________________________________________________________________________________________________________________________________ OPEN TEXT CORP (OTEX) BALANCE SHEET Fiscal year ends in June. USD in thousands ex 2015-06 2016-06 2017-06 2018-06 2019-06 Assets Current assets Cash Short-term investments 11,166 11,839 0 0 0 Total cash 711,165 1,295,596 443,357 682,942 941,009 Receivables 284,131 285,904 445,812 487,956 463,785 Deferred income taxes 30,711 0 0 0 0 Prepaid expenses 53,191 59,021 81,625 101,059 97,238 Other current assets 21,151 31,752 32,683 55,623 59,296 Total current assets 1,100,349 1,672,273 1,003,477 1,327,580 1,561,328 Non-current assets Property, plant and equipment Gross property, plant and equipment 306,652 367,094 458,461 588,301 678,869 Accumulated Depreciation -146,233 -183,434 -231,043 -324,096 -429,416 Net property, plant and equipment 160,419 183,660 227,418 264,205 249,453 Equity and other investments 20,494 18,062 30,909 49,635 67,002 Goodwill 2,161,592 2,325,586 3,416,749 3,580,129 3,769,908 Intangible assets 679,479 646,240 1,472,542 1,296,637 1,146,504 Deferred income taxes 155,411 241,161 1,215,712 1,122,729 1,004,450 Other long-term assets 110,751 67,162 113,755 124,114 135,330 Total non-current assets 3,288,146 3,481,871 6,477,085 6,437,449 6,372,647 Total assets 4,388,495 5,154,144 7,480,562 7,765,029 7,933,975 Liabilities and stockholders' equity Liabilities Current liabilities Short-term debt 8,000 8,000 182,760 10,000 10,000 Accounts payable 15,558 35,804 43,699 41,722 46,323 Deferred income taxes 997 0 0 0 0 Taxes payable 17,001 32,030 31,835 38,234 33,158 Accrued liabilities 212,383 214,647 282,257 251,713 273,767 Deferred revenues 358,066 373,549 570,328 644,211 641,656 Other current liabilities 13,429 6,999 16,164 8,719 9,813 Total current liabilities 625,434 671,029 1,127,043 994,599 1,014,717 Non-current liabilities Long-term debt 1,580,000 2,137,987 2,387,057 2,610,523 2,604,878 Deferred taxes liabilities 69,185 79,231 94,724 79,938 55,872 Accrued liabilities 24,826 19,138 36,702 35,874 30,338 Deferred revenues 28,223 37,461 61,678 69,197 46,974 Pensions and other benefits 56,737 61,993 58,627 65,719 75,239 Minority interest 523 541 961 1,037 1,215 Other long-term liabilities 174,283 168,108 181,412 191,921 221,287 Total non-current liabilities 1,933,777 2,504,459 2,821,161 3,054,209 3,035,803 Total liabilities 2,559,211 3,175,488 3,948,204 4,048,808 4,050,520 Stockholders' equity Common stock 808,010 817,788 1,439,850 1,707,073 1,774,214 Additional paid-in capital 126,417 147,280 173,604 0 0 Retained earnings 863,015 992,546 1,897,624 1,994,235 2,113,883 Treasury stock -19,986 -25,268 -27,520 -18,732 -28,766 Accumulated other comprehensive income 51,828 46,310 48,800 33,645 24,124 Total stockholders' equity 1,829,284 1,978,656 3,532,358 3,716,221 3,883,455 Total liabilities and stockholders' equity 4,388,495 5,154,144 7,480,562 7,765,029 7,933,975 ____________________________________________________________________________________________________________________________________________ OPEN TEXT CORP (OTEX) Statement of CASH FLOW Fiscal year ends in June. USD in thousands ex 2015-06 2016-06 2017-06 2018-06 2019-06 TTM Cash Flows From Operating Activities Depreciation & amortization 240,147 242,368 345,715 456,929 470,928 459,806 Amortization of debt discount/premium and is 10,525 9,903 6,298 4,242 0 0 Investment/asset impairment charges 2,919 0 833 155 0 0 Deferred income taxes -14,578 -54,461 -871,195 89,736 47,425 72,684 Stock based compensation 22,047 25,978 30,507 27,594 26,770 28,004 Accounts receivable 43,189 8,985 -126,784 -22,566 75,508 44,558 Prepaid expenses -3,534 316 -7,766 -7,274 -819 -13,852 Other working capital -18,037 -1,995 32,492 -85,043 -33,895 -59,465 Other non-cash items 240,353 294,628 1,029,153 246,112 290,361 328,724 Net cash provided by operating activities 523,031 525,722 439,253 709,885 876,278 860,459 Cash Flows From Investing Activities Investments in property, plant, and equipmen -77,046 -70,009 -79,592 -105,318 -63,837 -68,585 Acquisitions, net -327,792 -293,071 -2,114,647 -321,089 -383,723 -1,290,947 Sales/Maturities of investments 17,017 11,297 9,212 0 0 0 Other investing activities -10,574 -9,393 -5,937 -18,034 -16,966 -16,134 Net cash used for investing activities -398,395 -361,176 -2,190,964 -444,441 -464,526 -1,375,666 Cash Flows From Financing Activities Debt issued 800,000 600,000 481,875 1,200,000 0 750,000 Debt repayment -530,284 -8,000 -57,880 -1,149,620 -10,000 -10,000 Common stock issued 15,240 20,097 604,223 0 0 0 Common stock repurchased -10,126 -76,136 -8,198 0 -26,499 -14,389 Excess tax benefit from stock based compe 1,675 230 1,534 0 0 0 Dividend paid -87,629 -99,262 -120,581 -145,613 -168,859 -181,791 Other financing activities -18,271 -6,765 8,571 71,560 56,984 55,741 Net cash provided by (used for) financing 170,605 430,164 909,544 -23,673 -148,374 599,561 Effect of exchange rate changes -23,132 -10,952 1,767 -2,186 -3,826 -1,996 Net change in cash 272,109 583,758 -840,400 239,585 259,552 82,358 Cash at beginning of period 427,890 699,999 1,283,757 443,357 683,991 597,874 Cash at end of period 699,999 1,283,757 443,357 682,942 943,543 680,232 Free Cash Flow Operating cash flow 523,031 525,722 439,253 709,885 876,278 860,459 Capital expenditure -77,046 -70,009 -79,592 -105,318 -63,837 -68,585 Free cash flow 445,985 455,713 359,661 604,567 812,441 791,874 ____________________________________________________________________________________________________________________________________________
Average to Current P/E Ratios |
(OTEX) Open Text Corp. 2015 2016 2017 2018 2019 Annual Earnings: 1.12 1.55 5.32 1.15 1.40 Average Price During Year: 24.24 28.41 33.07 35.68 39.37 P/E Ratio: 21.64 18.33 6.22 31.03 28.12 Average 5-Year P/E Ratio = 21.07 Current Price = 44.95 Previous 5 Quarter Earnings: 0.51 0.36 0.36 0.36 0.52 Current Annualized (Last Four Quarters) Earnings = 1.24 ________ Average PE / Current PE = 0.58 -------- ...a number above 1.00 is good 1.00 or below is bad
Financial Ratios |
. . . . . . . . . . . . Lowest to Highest, Compared to Industry
Intrinsic Value (DCF) |
Intrinsic Value by Discounted Cash Flow Method:
Fair Value Estimator |
Fair Value Estimate:
Projected Earnings |
Research Reports |
Analysts' Opinions |
Insider Activity |
Institutional Activity |
Institutional Ownership:
Sentiment |
Zenith uses the "sentiment" score above or below 50 to award a positive or negative point in the Decision Matrix.
Short Interest Ratio |
As the short interest rises as a percentage of average daily share volume (Days to Cover), this is considered a measure of negative sentiment. Similarly, a decrease in that percentage is considered positive sentiment.
Standard & Poor's |
Management's Discussion of Results of Operations Excerpts |
Channeling Potential |
The summary below includes a value for `Degree,' which refers on a scale of 1 to 10 the range of a channel in the period under consi- deration compared to the total range of price movement. It also looks for the last closing price to be within the channel, otherwise zeroed. The `Index' is the `Degree' weighted for volatility. Generally, the the higher the index, the more suitable is the stock for trading as a `rolling stock' between channel high and low points. Results for OPEN TEXT CORPORATION: Symbol? OTEX Total Months Available: 25 Months in Cycle? 4 Months Covered by Periods: 12 Period 1 Period 2 Period 3 H1 L1 H2 L2 H3 L3 41.57 37.01 44.49 37.15 47.85 39.20 RANGE = 47.85 TO 37.01 Close = 47.29 CHANNEL = 41.57 TO 39.20 Degree = 2 Volatility = 5.01% Index = 1
MACD Histogram Divergence |
The theory is that connecting the two most recent peaks or valleys of the MACD histogram will signal the direction of the next major move.
Intraday Chart |
2 Days:
Val Idea |
2 out of 9 favorable, (negative opinion.)
Stock Consultant |
Point & Figure Chart |
Wall Street Analyzer |
Marketspace Chart |
Time Series Forecast |
Neural Network Prediction |
"Neurostock" can only track long trades. Therefore its performance, as tracked by itself on stocks which are consistently falling, may not appear as good as it could if each "sell" signal were a "short sale."
Ultimate Trading Systems |
2 out of 3 of the ultimate systems favor a downmove.
System Below:
Short term outlook: Positive: Bright Green, Negative: Bright Red
Long term outlook: Postive: Dark Green, Negative: Dark Red.
Recommendation |
Factors | Weighted Points |
---|---|
News | + 1 |
Comparison | - 1 |
Industry | + 1 |
Bond Issue | + 1 |
Zenith Index | + 1 |
Non-GAAP vs. GAAP Earnings | + 1 |
Cash Flow | + 1 |
Average to Current P/E | - 1 |
Ratios | + 1 |
Intrinsic Value DCF | + 1 |
Fair Value Estimator | + 1 |
Projected Earnings | + 1 |
Research Reports | + 1 |
Analysts | + 1 |
Executive Perquisites | - 1 |
Insider Activity | - 1 |
Institutional Activity | + 1 |
Management Reporting | + 1 |
Short Interest | - 1 |
Sentiment | + 1 |
Standard & Poor's | - 1 |
MACD Histogram Divergence | + 1 |
Val Idea | - 1 |
Stock Consultant | + 1 |
Point & Figure | - 1 |
Wall Street Analyzer | - 1 |
Marketspace Chart | + 1 |
Time Series Chart | - 1 |
Neural Network | - 1 |
Stock Options | + 1 |
Ultimate Trading Systems | - 1 |
Total | + 7 |
Place 665 shares of Open Text Corporation (OTEX) on the Active List.