Open Text Corp

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OTEX : NASDAQ : Technology
$64.33 | %
Today's Range: 0.0 - 0.0
Avg. Daily Volume: 308000.0
01/17/17 - 4:00 PM ET

Financial Analysis


OPEN TEXT CORP's gross profit margin for the first quarter of its fiscal year 2017 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 has strong liquidity. Currently, the Quick Ratio is 1.72 which shows the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 59.08% 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 Q1 FY17 Q1 FY16
Net Sales ($mil)491.66434.54
EBITDA ($mil)158.53154.41
EBIT ($mil)86.5293.81
Net Income ($mil)912.8841.29


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)837.67708.81
Total Assets ($mil)6072.314264.99
Total Debt ($mil)2145.281586.0
Equity ($mil)2878.661809.55


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin71.2872.35
EBITDA Margin32.2435.53
Operating Margin17.621.59
Sales Turnover0.310.43
Return on Assets19.034.94
Return on Equity40.1611.65
Debt Q1 FY17 Q1 FY16
Current Ratio1.831.94
Debt/Capital0.430.47
Interest Expense27.2819.05
Interest Coverage3.174.93


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)120.86120.73
Div / share0.230.2
EPS7.460.34
Book value / share23.8214.99
Institutional Own % n/a n/a
Avg Daily Volume308789.0262641.0

Valuation


BUY. OPEN TEXT CORP's P/E ratio indicates a significant discount compared to an average of 50.22 for the Software industry and a significant discount compared to the S&P 500 average of 25.49. To use another comparison, its price-to-book ratio of 2.69 indicates valuation on par with the S&P 500 average of 2.84 and a significant discount versus the industry average of 7.84. 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 6.78 Peers 50.22   OTEX 15.30 Peers 22.87

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 15.08 Peers 50.61   OTEX 0.09 Peers 0.80

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 2.69 Peers 7.84   OTEX 450.00 Peers 25.26

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 4.12 Peers 5.84   OTEX 2.65 Peers 5.17

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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