Top investors say Open Text Corporation (OTEX) ticks everything they need

Open Text Corporation (NASDAQ: OTEX) stock fell -0.71% on Friday to $27.87 against a previous-day closing price of $28.07. With 1.12 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.7 million shares. During the session, the Software – Application company that operates in wider Technology sector, reached to the highest price of $28.53 whereas the lowest price it dropped to was $27.82. The 52-week range on OTEX shows that it touched its highest point at $52.70 and its lowest point at $27.88 during that stretch. With its current market cap of 7.67 billion, OTEX has annualized dividend of $0.97 while the current yield stands at 3.49%. Beta for the stock currently stands at 0.99.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of OTEX was down-trending over the past week, with a drop of -6.10%, but this was down by -25.64% over a month. Three-month performance dropped to -25.64% while six-month performance fell -36.09%. The stock lost -44.58% in the past year, while it has lost -41.30% so far this year. A look at the trailing 12-month EPS for OTEX yields 1.46 with Next year EPS estimates of 3.42. For the next quarter, that number is 0.76. This implies an EPS growth rate of 28.60% for this year and 5.45% for next year. EPS is expected to decline by -1.20% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -18.30%.

Float and Shares Shorts:

At present, 270.21 million OTEX shares are outstanding with a float of 265.07 million shares on hand for trading. On Jul 14, 2022, short shares totaled 3.91 million, which was 1.46% higher than short shares on Jun 14, 2022. In addition to Mr. Mark J. Barrenechea as the firm’s Vice Chairman, CEO & CTO, Ms. Madhu Ranganathan CPA, M.B.A. serves as its Exec. VP & CFO.


Institutional Ownership:

Through their ownership of 76.71% of OTEX’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 48.10% of OTEX, in contrast to 21.81% held by mutual funds. Shares owned by individuals account for –. As the largest shareholder in OTEX with 5.61% of the stake, Jarislowsky, Fraser Ltd. holds 15,137,823 shares worth 15,137,823. A second-largest stockholder of OTEX, Mackenzie Financial Corp., holds 10,938,179 shares, controlling over 4.05% of the firm’s shares. Harris Associates LP is the third largest shareholder in OTEX, holding 10,896,921 shares or 4.04% stake. With a 2.91% stake in OTEX, the Oakmark International Fund is the largest stakeholder. A total of 7,842,300 shares are owned by the mutual fund manager. The Vanguard Total International Stoc, which owns about 1.30% of OTEX stock, is the second-largest Mutual Fund holder. It holds 3,509,741 shares valued at 110.49 million. Beutel Goodman Canadian Equity Fu holds 1.20% of the stake in OTEX, owning 3,234,170 shares worth 101.81 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for OTEX since 9 analysts follow the stock currently. There are 5 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 3 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With OTEX analysts setting a high price target of $60.00 and a low target of $34.00, the average target price over the next 12 months is $48.94. Based on these targets, OTEX could surge 115.29% to reach the target high and rise by 21.99% to reach the target low. Reaching the average price target will result in a growth of 75.6% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. OTEX will report FY 2023 earnings on 08/03/2023. Analysts have provided yearly estimates in a range of $3.37 being high and $3.22 being low. For OTEX, this leads to a yearly average estimate of $3.28. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Open Text Corporation surprised analysts by $0.03 when it reported $0.80 EPS against a consensus estimate of $0.77. The surprise factor in the prior quarter was $0.04. Based on analyst estimates, the high estimate for the next quarter is $0.80 and the low estimate is $0.75. The average estimate for the next quarter is thus $0.77.

Dividends & Yield:

In terms of dividends, OTEX has a current ratio of $0.97, which is $0.97 over the trailing 12-months, while a dividend of $0.68 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and OTEX currently yields $3.25. In the past year, OTEX’s dividend yield has been $3.25, but when looking at the stock over the past five years, its yield has been $1.67. Accordingly, OTEX has a current buyback yield of $3.87. This was $3.87 for the TTM, and it was $0.63 for the past five years.

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