Open Text trades at a forward price-to-earnings ratio of 4.9x with a PEG of 0.05, making it attractively valued relative to its earnings beat history and 162% free-cash-flow conversion rate, but a death-cross technical pattern and high implied volatility of 77% keep near-term risk elevated.
Thesis pillars
- Deep Value Fcf Conversion↑Improving
- Earnings Beat Streak→Stable
- Piotroski Quality Signal→Stable
- +1 more pillar — see the Why tab for full reasoning
Open Text Corporation (OTEX) Stock Analysis
Falling Knife setup
Technology · Software - Application
Sell if holding. At $22.66, A.R:R 1.2:1 is below the 1.5:1 minimum. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Thin upside margin: 7.3%; Sector modifier (Technology): -0.8.
OpenText is an Information Management company selling content management, cybersecurity, business network, DevOps, IT service management, and analytics software across private cloud, public cloud, and off-cloud deployments to G10K enterprises, SMBs, and governments. Content... Read more
Sell if holding. At $22.66, A.R:R 1.2:1 is below the 1.5:1 minimum. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Thin upside margin: 7.3%; Sector modifier (Technology): -0.8. Chart setup: Death cross, below all MAs, RSI 34, MACD bearish. Score 5.4/10, moderate confidence.
Passes 5/9 gates (clean insider activity, news events none recent, earnings proximity 41d clear, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum and favorable risk/reward ratio and death cross (50MA < 200MA). Suitability: speculative.
About Open Text Corporation
About Open Text Corporation
OpenText's Content Cloud generated 40% of total revenue in fiscal 2025, with Cybersecurity Cloud contributing another 25% and the remaining four business clouds — Business Network, DevOps, Observability and Service Management, and Analytics — splitting the rest at 10%, 10%, 10%, and 5%, respectively. The company serves Global 10,000 enterprises, SMBs, governments, and consumers, following its $6.2 billion acquisition of Micro Focus in January 2023 and its $2.275 billion divestiture of the Application Modernization and Connectivity business to Rocket Software in May 2024.
OpenText licenses and subscribes customers to its six business clouds — Content, Cybersecurity, Business Network, Observability and Service Management, Analytics, and DevOps — deployable in private cloud, public cloud, off-cloud, or via API, with revenue split between cloud services and subscriptions on one hand and license and support fees on the other. Within cloud services and subscriptions revenue specifically, Business Network Cloud and Cybersecurity Cloud each contribute 30% and Content Cloud 25%, a different mix than the company's overall segment revenue split. OpenText also earns fees from professional and managed services delivered off-cloud, in the OpenText Cloud, or through partner clouds including Google Cloud Platform, Amazon Web Services, and Microsoft Azure, and it integrates third-party and open-source software into its products alongside proprietary technology acquired through its Micro Focus, Carbonite, Webroot, and Zix acquisitions, among others.
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OpenText's near-term execution risk is compounded by leadership uncertainty: in April 2026, the company disclosed via Form 8-K that Interim CEO James McGourlay would transition to President, Chief Client Officer, while President and Chief Customer Officer Paul Duggan stepped down to an advisory role ahead of a July 1, 2026 departure, without naming a permanent successor CEO in the same release. That transition lands as OpenText is still absorbing its $6.2 billion Micro Focus acquisition and adjusting its portfolio following the 2024 AMC divestiture, meaning strategic continuity on cloud and AI integration now depends on whoever the board ultimately installs as permanent CEO.
See also: Technology · Software - Application
From Open Text Corporation's most recent 10-K filing, extracted August 30, 2026.
Recent developments
updated 2026-09-25Recent Developments — Open Text Corporation
Latest news
- NEWS Open Text Corp. stock rises Wednesday, outperforms market - MarketWatch — MarketWatch positive
- NEWS Open Text Corp. stock rises Wednesday, outperforms market - marketwatch.com — marketwatch.com positive
- NEWS Guardian Partners Inc. Cuts Stock Position in Open Text Corporation $OTEX - MarketBeat — MarketBeat neutral
- NEWS Open Text Corp (OTEX) Institutional Confidence - TradingKey — TradingKey neutral
- NEWS Open Text Corp. stock outperforms market despite losses on the day - MarketWatch — MarketWatch positive
Generated 2026-09-25T23:46:58Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- MEDIUMProductContent Cloud40%10-K Item 1: 'For the year ended June 30, 2025, total revenues is comprised of 40% from Content Cloud, 25% from Cybersecurity Cloud, 10% from Business Network Cloud, 10% from DevOps Cloud, 10% from Observability and Service Management Cloud, and 5% from Analytics Cloud.'
- MEDIUMProductCybersecurity Cloud25%10-K Item 1: 'For the year ended June 30, 2025, total revenues is comprised of 40% from Content Cloud, 25% from Cybersecurity Cloud, 10% from Business Network Cloud, 10% from DevOps Cloud, 10% from Observability and Service Management Cloud, and 5% from Analytics Cloud.'
Material Events(8-K, last 90d)
- 2026-04-20Item 5.02HIGHInterim CEO James McGourlay transitioned to President, Chief Client Officer effective April 20, 2026; no successor CEO named in the release. Separately, President/Chief Customer Officer Paul Duggan stepped down to EVP, Special Advisor, departing the company July 1, 2026.SEC filing →
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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Rating Breakdown
2 floor-breakers·1 ceiling hit
Price action weak — below key moving averages, no momentum carry. Needs a base before trend-continuation setups apply.static
Growth below the gate floor. Component breakdown shows what dragged the score down.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. At $22.66, A.R:R 1.2:1 is below the 1.5:1 minimum. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Thin upside margin: 7.3%; Sector modifier (Technology): -0.8. Chart setup: Death cross, below all MAs, RSI 34, MACD bearish. Prior stop was $21.65. Score 5.4/10, moderate confidence.
Take-profit target: $24.32 (+7.3% upside). Prior stop was $21.65. Stop-loss: $21.65.
Thin upside margin: 7.3%; Sector modifier (Technology): -0.8; Leverage penalty (D/E 1.5): -0.5.
Open Text Corporation trades at a P/E of 8.9 (forward 5.4). TrendMatrix value score: 8.8/10. Verdict: Sell.
9 analysts cover OTEX with a consensus score of 3.9/5. Average price target: $28.
What does Open Text Corporation do?OpenText is an Information Management company selling content management, cybersecurity, business network, DevOps, IT...
OpenText is an Information Management company selling content management, cybersecurity, business network, DevOps, IT service management, and analytics software across private cloud, public cloud, and off-cloud deployments to G10K enterprises, SMBs, and governments. Content Cloud generated 40% and Cybersecurity Cloud 25% of fiscal 2025 total revenue, following the 2023 Micro Focus acquisition and 2024 divestiture of the AMC business to Rocket Software.