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→Stable
- Earnings Beat Streak↓Deteriorating
- Piotroski Quality Signal→Stable
- +1 more pillar — see the Why tab for full reasoning
Open Text Corporation (OTEX) Stock Analysis
Technology · Software - Application
Sell if holding. Analyst target reached at $24.55 — A.R:R is negative (-0.2) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Sector modifier (Technology): -0.8.
Open Text Corporation provides Information Management software and services — spanning content management, cybersecurity, supply-chain/business network, IT service management, DevOps, and analytics — delivered via private cloud, public cloud, off-cloud, or API deployment to... Read more
Sell if holding. Analyst target reached at $24.55 — A.R:R is negative (-0.2) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Sector modifier (Technology): -0.8. Chart setup: No clear chart pattern; technical signals are mixed. Score 5.3/10, high confidence.
Passes 5/9 gates (clean insider activity, news events none recent, earnings proximity 61d clear, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum and favorable risk/reward ratio and death cross (50MA < 200MA). Suitability: moderate.
About Open Text Corporation
About Open Text Corporation
OpenText's Content Cloud, its largest of six business clouds, generated 40% of total revenue in fiscal 2025, followed by Cybersecurity Cloud at 25%, Business Network Cloud, DevOps Cloud, and Observability and Service Management Cloud at 10% each, and Analytics Cloud at 5%. The company serves Global 10,000 enterprises, SMBs, governments, and consumers, following its $6.2 billion acquisition of Micro Focus International in January 2023 and its $2.275 billion divestiture of the Application Modernization and Connectivity business to Rocket Software in May 2024.
OpenText earns revenue from cloud subscriptions, on-premise licenses, and professional and managed services, delivered off-cloud, in the OpenText Cloud, in hybrid scenarios, or through partner clouds including Google Cloud Platform, Amazon Web Services, and Microsoft Azure. Within cloud services and subscriptions revenue specifically, Business Network Cloud and Cybersecurity Cloud each contributed 30% and Content Cloud contributed 25%, a different mix than the total-revenue split, reflecting how much of Content Cloud's revenue still comes from on-premise licenses rather than subscriptions. The company used the AMC Divestiture proceeds to complete a $2.0 billion debt reduction, terminating its Term Loan B and paying down its Acquisition Term Loan. OpenText's software also depends on third-party infrastructure software, including products from Hewlett-Packard, Oracle, and Microsoft, and the 10-K notes that weaknesses in that underlying infrastructure software could harm OpenText's reputation and business if the company cannot correct or compensate for them.
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OpenText's own software runs on top of infrastructure it doesn't control: the 10-K states that its Internet and intranet applications depend on the stability, functionality, and scalability of infrastructure software from named third parties, including Hewlett-Packard, Oracle, and Microsoft, and that OpenText 'may not be able to correct or compensate for' weaknesses in that infrastructure if they exist. That dependency sits underneath a company whose growth strategy is built on acquiring and integrating outside technology — the $6.2 billion Micro Focus deal being the largest example — meaning OpenText's competitive position rests as much on the reliability of vendors and acquired codebases it doesn't fully control as on its own six business clouds.
See also: Technology · Software - Application
From Open Text Corporation's most recent 10-K filing, extracted August 23, 2026.
Recent developments
updated 2026-09-04Recent 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 2026-09-04T13:27:38Z.
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'
Material Events(8-K, last 90d)
- 2026-04-20Item 5.02MEDIUMJames McGourlay transitioned from Interim CEO to President, Chief Client Officer, effective April 20, 2026; no successor CEO named in this filing. Same day, Paul Duggan stepped down as President/Chief Customer Officer 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
3 floor-breakers
Growth below the gate floor. Component breakdown shows what dragged the score down.static
Momentum below the gate floor. Component breakdown shows what dragged the score down.static
Technicals 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. Analyst target reached at $24.55 — A.R:R is negative (-0.2) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Sector modifier (Technology): -0.8. Chart setup: No clear chart pattern; technical signals are mixed. Prior stop was $23.24. Score 5.3/10, high confidence.
Take-profit target: $25.13 (-1.3% upside). Prior stop was $23.24. Stop-loss: $23.24.
Analyst target reached - limited upside remaining; Sector modifier (Technology): -0.8; Leverage penalty (D/E 1.5): -0.5.
Open Text Corporation trades at a P/E of 9.1 (forward 5.8). TrendMatrix value score: 8.3/10. Verdict: Sell.
9 analysts cover OTEX with a consensus score of 3.9/5. Average price target: $28.
What does Open Text Corporation do?Open Text Corporation provides Information Management software and services — spanning content management,...
Open Text Corporation provides Information Management software and services — spanning content management, cybersecurity, supply-chain/business network, IT service management, DevOps, and analytics — delivered via private cloud, public cloud, off-cloud, or API deployment to enterprises, SMBs, governments, and consumers worldwide. In fiscal 2025, Content Cloud, its largest business cloud, generated 40% of total revenue, following the January 2023 Micro Focus acquisition and the May 2024 divestiture of its AMC business to Rocket Software.