Open Text Corp

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OTEX : NASDAQ : Technology
$61.31 | %
Today's Range: 61.13 - 61.75
Avg. Daily Volume: 310,100
07/22/16 - 4:00 PM ET

Financial Analysis


OPEN TEXT CORP's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased, representing an increase to the bottom line. OPEN TEXT CORP has strong liquidity. Currently, the Quick Ratio is 1.92 which shows the ability to cover short-term cash needs. The company managed to increase its liquidity from the same period a year ago, despite already having strong liquidity to begin with. This would indicate improved cash flow.

During the same period, stockholders' equity ("net worth") has increased by 7.38% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)440.54447.58
EBITDA ($mil)146.25121.42
EBIT ($mil)86.958.23
Net Income ($mil)69.1226.61


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)890.41632.21
Total Assets ($mil)4423.374318.54
Total Debt ($mil)1582.01597.8
Equity ($mil)1909.891778.48


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin71.970.9
EBITDA Margin33.1927.12
Operating Margin19.7313.01
Sales Turnover0.410.43
Return on Assets6.035.87
Return on Equity13.9714.26
Debt Q3 FY16 Q3 FY15
Current Ratio2.061.66
Debt/Capital0.450.47
Interest Expense16.2316.87
Interest Coverage5.353.45


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)120.59121.8
Div / share0.20.17
EPS0.570.22
Book value / share15.8414.6
Institutional Own % n/a n/a
Avg Daily Volume300696.0284967.0

Valuation


BUY. This stock's P/E ratio indicates a significant discount compared to an average of 64.39 for the Software industry and a premium compared to the S&P 500 average of 25.03. Conducting a second comparison, its price-to-book ratio of 3.82 indicates a premium versus the S&P 500 average of 2.80 and a significant discount versus the industry average of 6.80. 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 27.61 Peers 64.39   OTEX 13.56 Peers 21.74

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 15.25 Peers 48.62   OTEX 0.31 Peers 0.78

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 3.82 Peers 6.80   OTEX 5.79 Peers -35.22

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 4.00 Peers 5.80   OTEX -2.15 Peers 5.73

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.

 

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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