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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#2047
Positioning
Market Dominance
Manufacturing
Computer Software
$9.5B
Mark J. Barrenechea
Open Text Corporation designs, develops, markets, and sells information management software and solutions. It offers content services; business network that manages data within the organization and outside the firewall. The company also provides Discovery platform that provides forensics and unstructured data analytics.
Headcount
14.8K
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Dates updated upon official exchange announcement.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = OTEX ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$UL UNILEVER PLC | 78 | 96 | 98 | 59 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$ASML ASML HOLDING NV | 77 | 89 | 86 | 83 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$ESLT ELBIT SYSTEMS LTD | 76 | 81 | 87 | 85 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$MT ArcelorMittal | 75 | 71 | 98 | 85 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$AMAT APPLIED MATERIALS INC /DE | 75 | 85 | 87 | 84 | 20.9x | 13.6x | 32.9% | 20.5% | 48.8% | 30.6% | 24.4% | 7.7% | 0.9% | 32.0x | $148.6B | VS | |
$SIMO Silicon Motion Technology CORP | 75 | 84 | 86 | 85 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$CODA Coda Octopus Group, Inc. | 74 | 83 | 90 | 79 | 16.3x | 11.9x | 7.4% | 7.5% | 68.3% | 19.5% | 18.2% | 29.0% | 0.0% | 0.0x | $84M | VS | |
$GSK GSK plc | 74 | 84 | 90 | 70 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$EFXT Enerflex Ltd. | 74 | 80 | 91 | 83 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$BUD Anheuser-Busch InBev SA/NV | 74 | 84 | 97 | 63 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$OTEX OPEN TEXT CORP | 50 | 61 | 80 | 35 | 9.7x | 11.8x | 15.8% | 4.7% | 72.9% | 20.4% | 12.2% | 4.5% | 2.8% | 158.0x | $9.5B | ||
| SECTOR BENCH | - | - | - | - | - | 22.3x | 11.5x | -1.9% | 0.9% | 44.1% | 2.5% | 1.0% | 6.7% | 0.0% | 0.2x | - | REF |
OPEN TEXT CORP (OTEX) receives a "Reduce" rating with a composite score of 49.7/100. It ranks #2047 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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HQ Base
Waterloo, Ontario
Lagging peers — losers tend to keep underperforming
Trading at a discount to fundamentals — favorable entry valuation
High profitability & efficiency — strong quality floor supports entry
Low volatility — smoother ride and historically better risk-adjusted returns
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Manufacturing sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for OTEX.
View All RatingsROE proxy 15.8% (sector -1.9%)
GM 73% vs sector 44%, OM 20% vs sector 3%
Capital turnover N/A
Rev growth 5%, 11yr history
Interest coverage N/A
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
We rate OPEN TEXT CORP (OTEX) as a Reduce with a composite score of 49.7/100 at a current price of $23.99. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential.
OPEN TEXT CORP holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 49.7/100 places it at rank #2047 in our full universe.
Narrow
Medium
Standard
Undervalued
Gross margins of 73% signal strong pricing power.
Returns on equity of 15.8% exceed cost of capital.
Value factor score of 80 suggests attractive pricing.
Leverage of 158% D/E amplifies downside risk.
Vulnerability to macroeconomic shocks and interest rate volatility.
OPEN TEXT CORP represents a reduce based on multi-factor quantitative performance.
OPEN TEXT CORP receives a Reduce rating from our analysis, with a composite score of 49.7/100 and 2 out of 5 stars, ranking #2047 out of 7,333 stocks. OTEX's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
With a quality score of 61/100, OTEX shows adequate but unremarkable business quality. The company reports a return on equity of 15.8% (sector avg: -1.9%), gross margins of 72.9% (sector avg: 44.1%), net margins of 12.2% (sector avg: 1.0%). This suggests the company generates acceptable returns but may lack the competitive positioning or operational efficiency to stand out from peers.
OTEX carries a solid value score of 80/100, pointing to an attractively priced stock relative to peers. Key valuation metrics include a P/E ratio of 9.73x, an EV/EBITDA of 11.79x, a P/B ratio of 1.53x. This score suggests reasonable compensation for the risks involved, with potential upside if the market recognizes the stock's underlying worth.
OPEN TEXT CORP's investment score of 30/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of 4.5% vs. a sector average of 6.7% and a return on assets of 4.7% (sector: 0.9%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
OTEX is currently showing below-average momentum at 35/100, which may indicate weakening institutional interest or negative sentiment shifts. Revenue growth stands at 4.5% year-over-year, while a beta of 0.95 reflects its sensitivity to broader market moves. Investors should note that declining momentum can precede further price weakness, though contrarian opportunities sometimes emerge at these levels.
OTEX shows good financial stability with a score of 70/100. Key stability metrics include a beta of 0.95 and a debt-to-equity ratio of 158.00x (sector avg: 0.2x). This suggests manageable leverage and moderate price volatility, making it appropriate for investors seeking a balance between growth potential and capital preservation.
The short interest score of 46/100 for OTEX suggests somewhat elevated bearish positioning by institutional traders. Specific risk factors include elevated leverage (D/E: 158.00x). With a $9.5B market cap (mid-cap), OPEN TEXT CORP may experience above-average volatility. Investors should consider whether the short thesis has merit or if it creates a potential short-squeeze opportunity.
OTEX pays a solid dividend yield of 2.8%, contributing an income component to total returns. This moderate yield suggests a balance between returning capital to shareholders and retaining earnings for reinvestment — a common profile among quality compounders.
OPEN TEXT CORP is a mid-cap company in the Manufacturing sector, ranked #0 of 50 in its sector (100th percentile) and #2047 of 7,333 overall (72nd percentile). Key comparisons include ROE of 15.8% exceeding the -1.9% sector median and operating margins of 20.4% above the 2.5% sector average. This top-quartile standing reflects exceptional competitive strength relative to Manufacturing peers.
While OTEX currently exhibits a REDUCE profile, superior opportunities exist within the MANUFACTURING sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
View Top Manufacturing Alpha →Quant Factor Profile
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Improvement in Investment (30) would have the largest impact on the composite score.
EV/EBITDA IN LINE WITH SECTOR BENCHMARKS
ROE 929% BELOW SECTOR MEDIAN
Gross Margin 66% ABOVE SECTOR MEDIAN (FAVORABLE)
Above 50MA
37.18%
Net New Highs
+51081
In early February 2026, Open Text Corporation reported second-quarter results showing slightly lower quarterly revenue and earnings, reaffirmed its full-year 2026 revenue growth target of 1% to 2%, declared a US$0.275 quarterly dividend, and increased its share repurchase authorization by US$200 million to a total of US$500 million. The combination of softer quarterly performance, continued commitment to dividends, and an expanded buyback program highlights management’s focus on balancing...
Open Text (NasdaqGS:OTEX) is back in focus after its latest earnings release, where revenue topped analyst expectations despite a small year-on-year decline, and the company lifted its fiscal 2026 share repurchase authorization by US$200 million. See our latest analysis for Open Text. The earnings beat and larger buyback plan sit against a weaker recent share price, with a 30 day share price return of 25.84% decline and a 1 year total shareholder return of 13.42% decline, suggesting momentum...
Open Text Corporation's ( NASDAQ:OTEX ) recent soft profit numbers didn't appear to worry shareholders, as the stock...
Open Text Corporation (NASDAQ:OTEX) is one of the best affordable tech stocks to buy right now. Open Text Corporation (NASDAQ:OTEX) released its earnings for the December-ending quarter on February 5 and reported $1.33 billion quarterly revenue. The revenue is a 0.6% year over year decline but surpassed the $1.29 billion that analysts anticipated. Management attributed […]
OpenText™ (NASDAQ: OTEX), (TSX: OTEX) (the Company), today announced that it has increased its previously announced Fiscal 2026 share repurchase program by US$200 million, whereby it intends to purchase for cancellation up to a maximum aggregate value of US$500 million of its common shares (Common Shares) pursuant to a normal course issuer bid (NCIB). The maximum number of Common Shares that may be acquired under the NCIB will remain unchanged at the 24,906,456 Common Shares, which was previousl