Open Text Corp

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OTEX : NASDAQ : Technology
$64.88 -0.12 | -0.18%
Today's Range: 64.50 - 65.18
Avg. Daily Volume: 261,300
09/29/16 - 4:00 PM ET

Financial Analysis


OPEN TEXT CORP's gross profit margin for the fourth quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. OPEN TEXT CORP is extremely liquid. Currently, the Quick Ratio is 2.40 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 8.16% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q4 FY16 Q4 FY15
Net Sales ($mil)483.8482.71
EBITDA ($mil)166.13155.89
EBIT ($mil)103.5791.3
Net Income ($mil)86.3968.8


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)1295.6711.17
Total Assets ($mil)5154.144388.5
Total Debt ($mil)2145.991588.0
Equity ($mil)1978.661829.28


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin72.1473.43
EBITDA Margin34.3332.29
Operating Margin21.4118.91
Sales Turnover0.350.42
Return on Assets5.515.33
Return on Equity14.3712.8
Debt Q4 FY16 Q4 FY15
Current Ratio2.491.76
Debt/Capital0.520.46
Interest Expense21.918.19
Interest Coverage4.735.02


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)120.77121.67
Div / share0.230.2
EPS0.710.56
Book value / share16.3815.04
Institutional Own % n/a n/a
Avg Daily Volume262864.0293368.0

Valuation


BUY. This stock's P/E ratio indicates a significant discount compared to an average of 62.28 for the Software industry and a premium compared to the S&P 500 average of 25.19. Conducting a second comparison, its price-to-book ratio of 4.06 indicates a premium versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 7.58. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, OPEN TEXT CORP proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
OTEX 28.44 Peers 62.28   OTEX 15.29 Peers 24.12

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

OTEX is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

OTEX is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
OTEX 15.47 Peers 32.90   OTEX 0.38 Peers 0.86

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

OTEX is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

OTEX trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
OTEX 4.06 Peers 7.58   OTEX 22.51 Peers 35.16

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

OTEX is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, OTEX is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
OTEX 4.41 Peers 5.85   OTEX -1.50 Peers 4.71

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

OTEX is trading at a discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

OTEX significantly trails its peers on the basis of sales growth

 

 

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