Open Text Corp

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OTEX : NASDAQ : Technology
$33.93 -0.07 | -0.21%
Today's Range: 33.65 - 34.02
Avg. Daily Volume: 473800.0
03/27/17 - 4:00 PM ET

Financial Analysis


OPEN TEXT CORP's gross profit margin for the second quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. OPEN TEXT CORP is extremely liquid. Currently, the Quick Ratio is 3.20 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has increased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 88.29% 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 Q2 FY17 Q2 FY16
Net Sales ($mil)542.71465.35
EBITDA ($mil)192.24178.98
EBIT ($mil)118.27119.13
Net Income ($mil)45.0287.69


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)1725.73742.23
Total Assets ($mil)6882.194320.77
Total Debt ($mil)2397.831584.0
Equity ($mil)3489.61853.25


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin73.6274.0
EBITDA Margin35.4238.46
Operating Margin21.7925.6
Sales Turnover0.280.42
Return on Assets16.175.19
Return on Equity31.912.1
Debt Q2 FY17 Q2 FY16
Current Ratio3.292.01
Debt/Capital0.410.46
Interest Expense27.7419.19
Interest Coverage4.266.21


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)262.08240.9
Div / share0.120.1
EPS0.180.36
Book value / share13.317.69
Institutional Own % n/a n/a
Avg Daily Volume410058.0320764.0

Valuation


BUY. OPEN TEXT CORP's P/E ratio indicates a significant discount compared to an average of 55.43 for the Software industry and a significant discount compared to the S&P 500 average of 26.33. To use another comparison, its price-to-book ratio of 2.55 indicates a discount versus the S&P 500 average of 2.93 and a significant discount versus the industry average of 8.41. 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 7.45 Peers 55.43   OTEX 17.25 Peers 21.92

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 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 13.51 Peers 33.36   OTEX NM Peers 0.83

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.

 

Neutral. 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's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
OTEX 2.55 Peers 8.41   OTEX 394.56 Peers 43.15

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.

 

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

OTEX is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
OTEX 4.54 Peers 6.32   OTEX 7.02 Peers 7.57

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 significant discount to its industry on this measurement.

 

Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

OTEX is keeping pace with its peers on the basis of sales growth.

 

 

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