Open Text Corporation (OTEX.TO) stock analysis

In our weekly check, Open Text Corporation is graded B (A to F). Of 25 checks on debt, profit, cash flow and trend: 19 pass, warnings: 6, red flags: 0.

About Open Text Corporation

Open Text Corporation is a Technology company (Software - Application) based in Canada, listed on TSX as OTEX.TO.

What our checks show for OTEX.TO

Warning signs

• Net debt is 2.8x a year of EBITDA (debt/equity 1.49). That limits room in a downturn and raises refinancing risk.
• Operating profit covers interest only 3.5 times: a weak year could make the payments hard.
• Analysts expect only about 2.9% a year of growth in revenue.
• The price swings a lot: 38% annual volatility. Expect large ups and downs.
• The stock has fallen as much as 59% from a peak. Would you have held through that?
• The stock is still below its previous peak.

Strengths

• The gross margin is 73.7% and has risen by 4.1 points: pricing power is holding.
• Operating cash flow is 1.57x net profit: the profit arrives as real cash.
• Analysts expect earnings per share to grow about 25.4% a year over the next years.
• Analysts expect the net margin to improve by 9.9 points from today's 12.3%.
• Earnings per share grew 66.4% a year over the last 3 years.
• Net profit grew 62.3% a year over the last 3 years.

Next earnings report: 2026-11-05

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Questions

What grade does Open Text Corporation (OTEX.TO) have?

In our weekly check, Open Text Corporation is graded B (A to F). Of 25 checks on debt, profit, cash flow and trend: 19 pass, warnings: 6, red flags: 0. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of OTEX.TO stock?

This week's biggest flags for Open Text Corporation: High debt, Weak interest cover, Weak revenue forecast. In total 6 of 25 checks show a warning or a red flag.

What does Open Text Corporation do?

Open Text Corporation is a Technology company (Software - Application) based in Canada, listed on TSX as OTEX.TO.

When does Open Text Corporation report earnings next?

The next earnings report is expected on 2026-11-05. We re-run the checks every week, so the grade can change after it.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-31

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