Added to YB: 2024-05-24
Pitch date: 2024-05-23
OTEX [bullish]
Open Text Corporation
+16.52%
current return
Author Info
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Company Info
Open Text Corporation designs, develops, markets, and sells information management software and solutions in North, Central, and South America, Europe, the Middle East, Africa, Australia, Japan, Singapore, India, and China.
Market Cap
$8.3B
Pitch Price
$28.49
Price Target
71.80 (+116%)
Dividend
3.27%
EV/EBITDA
8.70
P/E
17.65
EV/Sales
2.68
Sector
Software
Category
value
Open Text: Quality at a bargain price
OTEX: Largest Canadian software provider, 98/100 top global clients. 80% recurring rev, 30%+ EBITDA margin, 25% FCF margin. Fell 45% on debt-fueled M&A amid rate hikes. Bought MFGP to boost cloud exposure. Debt 5.2x EBITDA, cut to 3x via asset sale. Sees 3-6% rev growth, 20% margins by 2027. Trades 7x 2027 FCF. $72 PT for 132% upside in 3yrs. Catalysts: integration benefits, lower rates. Risks: macro weakness, dilution.
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