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$OTEX

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Research

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

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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Wire

Open Text Completes $150 Million Vertica Sale to Rocket Software

Open Text (OTEX) said Monday it has completed the sale of Vertica to Rocket Software, which is owned by Bain Capital, for $150 million in cash before taxes and other costs.Proceeds from the divestiture will be used to pay off debt, the company said, adding that as part of the deal, Vertica's software, customer contracts, services, and employees will move to Rocket Software.Price: $24.80, Change: $+0.09, Percent Change: +0.35%

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Wire

UBS Cuts Price Target on Open Text to $25 From $26, Maintains Neutral Rating

Open Text (OTEX) has an average rating of hold and mean price target of $29.69, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www..com/contact-us)Price: $23.83, Change: $+0.14, Percent Change: +0.59%

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Research

Research Alert: Otex Delivers Q3 Beats; Enterprise Cloud Bookings Accelerates.

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:OTEX reported Q3 revenue of $1.283B, growing 2.2% Y/Y and beating consensus by $10M, while non-GAAP EPS of $1.01 exceeded estimates by $0.09 and grew 23.2% Y/Y. Cloud revenue rose 6.6% to $493M with enterprise cloud bookings accelerating 29.6% to $196M, marking the 21st consecutive quarter of cloud organic growth. The enterprise cloud bookings acceleration suggests OTEX's "Enterprise Information Management for AI" positioning is gaining customer traction amid the enterprise AI transition. The completion of CEO transition with Ayman Antoun's April 2026 start removes a key business overhang for the stock. Adjusted EBITDA margin expanded to 34.1% from 31.5% prior year, demonstrating strong operational leverage despite continued AI and cloud investments. We believe the company's disciplined cost management supports margin expansion. The company returned $313M to shareholders including $247M in repurchases, though free cash flow declined 18.4% to $305M on higher capex and working capital changes.

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Mining & Metals

Open Text Up 1.3% After Hours as its Fiscal Q3 Profit Jumps, Beats Estimates

Open Text (OTEX.TO, OTEX) was up 1.3% at last look in after-hours Nasdaq trading after the company said Thursday that its fiscal third-quarter profit and revenue rose year over year, beating analysts' estimates.The cloud-computing and AI company's net profit jumped 86% year-on-year to US$172.65 million, or US$1.01 per share, in the quarter ended March 31, up from US$92.85 million, or US$0.82, a year ago. FactSet expected US$0.92 per share.Revenue rose 2.3% to US$1.28 billion from US$1.25 billion. FactSet projected revenue of US$1.28 billion.OpenText's board also declared a dividend of US$0.275 per share, unchanged from the previous quarter. The dividend will be paid on June 19 to shareholders of record as of June 5.The company also said Ayman Antoun became its chief executive, effective April 20."I am delighted to join OpenText at a defining moment for our clients and our industry. Data is a company's most precious natural resource, and OpenText is uniquely positioned to help clients securely unlock the value of that data to solve complex challenges and win," said Antoun. "I am focused on listening and learning, energized by the momentum already built, and the opportunity ahead to drive disciplined execution, strong client outcomes, and sustainable growth"The company's shares were up down US$0.31 at last look at US$2.00 after-hours. They closed up C$0.94 to C$32.35 on the Toronto Stock Exchange.

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Research

CIBC Lowers Price Target on Software and Services Stocks

CIBC Capital Markets lowered its price target on eight software and services stocks ahead of Q1 results for the sector."We expect high single-digit growth in revenue and EBITDA within our coverage in Q1, despite AI-disruption concerns that have reduced the market cap of our Software coverage by an average of 24% year to date," analyst Stephanie Price said in a note to clients."With limited AI-related read-throughs from near-term earnings, investors have been reducing multiples and rethinking terminal values," Price said."For Q1, we are roughly in line with consensus expectations," the analyst said. "We expect a volatile earnings season and a focus on AI narrative for companies that meet or beat consensus expectations.""We expect that earnings misses could result in outsized market reactions," Price said. "That said, with an average 8% consensus EBITDA growth expectation for the quarter, we also see the possibility of upside from multi-year valuation lows."Price made the following changes:CGI Inc. (GIB-A.TO) to $112 from $132 (Neutral)Computer Modelling Group Ltd. (CMG.TO) to $5 from $5.50 (Neutral)Constellation Software Inc. (CSU.TO) to $4080 from $4610 (Outperformer)Descartes Systems Group Inc. (DSG.TO, DSGX) to US$116 from US$126 (Outperformer)Docebo Inc. (DCBO.TO, DCBO) to US$28 from US$34 (Outperformer)Kinaxis Inc. (KXS.TO) to $171 from $203 (Outperformer)Open Text Corp. (OTEX.TO, OTEX) to US$27 from US$32 (Neutral)Thomson Reuters Corp. (TRI.TO, TRI) to US$124 from US$140 (Outperformer)(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www..com/contact-us)

$CMG.TO$CSU.TO$DCBO$DCBO.TO$DSG.TO$DSGX$GIB-A.TO$KXS.TO$OTEX$OTEX.TO$TRI$TRI.TO
Mining & Metals

RBC on OpenText's Preliminary Q3 Revenue

OpenText (OTEX.TO, OTEX) last week pre-announced preliminary third-quarter revenue of US$1.28 billion, effectively in line with RBC/consensus estimates of $1.27 billion.In a note, RBC Capital Markets analyst Paul Treiber, who has a sector-perform rating and US$30.00 price target on the stock, estimates the third-quarter preliminary revenue implies constant-currency organic growth of -0.9%, better than the -1.6% in RBC's model and up from -2.6% in the second quarter."[T]he results suggest OpenText's Q3 was largely stable despite geopolitical disruptions during the quarter. In light of the continued pessimism for software stocks, an in-line quarter with slightly negative organic growth is unlikely to be a material catalyst for the stock. However, with OpenText trading at a deeply discounted valuation of 5.7x EV/EBITDA and 4.8x P/E, the results shouldn't weigh on the shares, in our view."Price: $29.64, Change: $+0.81, Percent Change: +2.81%

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