The firm said it lowered its rating on the company, which provides a suite of information management software products, based on a valuation call.
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"We rate OPEN TEXT CORP (OTEX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
Separately, TheStreet Ratings team rates OPEN TEXT CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
- The revenue growth came in higher than the industry average of 7.9%. Since the same quarter one year prior, revenues rose by 31.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 72.72% and other important driving factors, this stock has surged by 41.10% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- OPEN TEXT CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, OPEN TEXT CORP increased its bottom line by earning $1.26 versus $1.07 in the prior year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 77.8% when compared to the same quarter one year prior, rising from $25.81 million to $45.88 million.
- You can view the full analysis from the report here: OTEX Ratings Report