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Research Alert: CFRA Maintains Hold Rating On Shares Of Open Text Corporation

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lower our target price to CAD36 from CAD38, on a forward P/E of 6x our FY 27 EPS projection, below its five-year average. We increase our FY 26 EPS estimate to USD4.24 from USD4.15 and our FY 27 EPS projection to USD4.44 from USD4.42. OTEX reported Q3 FY 26 revenue of USD1.28B, up 0.8% Y/Y, with cloud revenue at USD493M (up 6.6%), driven by Content Cloud's 22% cloud revenue growth. Enterprise cloud bookings rose meaningfully, with 41 deals over USD1M (up 28% Y/Y), reflecting continued customer cloud migration momentum. Adjusted EBITDA margin expanded 260 bps to 34.1% during the quarter as OTEX realizes cost savings from its business optimization plan. While we appreciate margin expansion and its AI-centric strategy, we believe consistent execution under new leadership is critical, particularly as OTEX navigates portfolio divestitures and faces competitive pressures that could challenge its AI and cloud execution relative to peers.

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