Latest Ratios: P/E Ratio 8.9x · EV/EBITDA 2.9x · ROE 16.2%. (1997–2026 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $5.6B | $5.5B | $7.7B | $8.2B | $11.2B | $10.3B | $13.9B | $11.5B | $11.1B | $9.4B | $8.1B |
| Enterprise Value | $4.9B | $4.8B | $13.2B | $13.6B | $19.3B | $13.1B | $16.2B | $14.3B | $12.8B | $11.4B | $10.2B |
| P/E Ratio → | 8.95 | 8.59 | 17.70 | 17.57 | 74.20 | 26.28 | 43.05 | 49.98 | 38.87 | 38.67 | 7.87 |
| P/S Ratio | 1.07 | 1.05 | 1.49 | 1.43 | 2.48 | 3.00 | 3.96 | 3.77 | 3.83 | 3.46 | 3.45 |
| P/B Ratio | 1.43 | 1.38 | 1.96 | 1.95 | 2.79 | 2.55 | 3.39 | 2.88 | 2.86 | 2.53 | 2.28 |
| P/FCF | 6.94 | 6.84 | 11.20 | 10.13 | 17.15 | 11.58 | 17.10 | 13.09 | 13.69 | 15.57 | 22.43 |
| P/OCF | 5.56 | 5.49 | 9.27 | 8.46 | 14.42 | 10.48 | 15.86 | 12.10 | 12.69 | 13.26 | 18.37 |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 0.92 | 2.55 | 2.38 | 4.25 | 3.81 | 4.61 | 4.67 | 4.40 | 4.18 | 4.36 |
| EV / EBITDA | 2.89 | 2.84 | 7.85 | 7.50 | 14.15 | 11.12 | 12.39 | 12.98 | 11.74 | 11.86 | 13.09 |
| EV / EBIT | 4.51 | 5.60 | 15.34 | 10.53 | 31.34 | 21.84 | 21.26 | 29.93 | 21.85 | 22.67 | 27.07 |
| EV / FCF | — | 5.95 | 19.18 | 16.82 | 29.37 | 14.71 | 19.89 | 16.25 | 15.75 | 18.77 | 28.34 |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 73.7% | 73.7% | 72.3% | 62.9% | 61.0% | 60.9% | 60.5% | 57.8% | 57.5% | 56.6% | 57.3% |
| Operating Margin | 20.6% | 20.6% | 20.1% | 17.7% | 15.4% | 19.8% | 21.8% | 19.5% | 21.1% | 19.0% | 18.2% |
| Net Profit Margin | 12.3% | 12.3% | 8.4% | 8.1% | 3.4% | 11.4% | 9.2% | 7.5% | 10.0% | 8.6% | 44.8% |
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 16.2% | 16.2% | 10.7% | 11.2% | 3.8% | 9.6% | 7.9% | 5.9% | 7.6% | 6.5% | 38.0% |
| ROA | 4.8% | 4.8% | 3.1% | 2.9% | 1.1% | 3.9% | 3.2% | 2.5% | 3.7% | 3.1% | 16.6% |
| ROIC | 12.8% | 12.8% | 8.2% | 7.0% | 5.5% | 7.7% | 8.7% | 7.2% | 8.2% | 6.8% | 7.5% |
| ROCE | 10.1% | 10.1% | 9.3% | 8.0% | 6.2% | 8.0% | 9.2% | 7.8% | 8.9% | 7.9% | 7.9% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 0.06 | 0.06 | 1.69 | 1.59 | 2.30 | 1.11 | 0.94 | 1.12 | 0.67 | 0.70 | 0.73 |
| Debt / EBITDA | 0.14 | 0.14 | 3.96 | 3.69 | 6.79 | 3.81 | 2.97 | 4.05 | 2.40 | 2.74 | 3.30 |
| Net Debt / Equity | — | -0.18 | 1.40 | 1.29 | 1.99 | 0.69 | 0.55 | 0.69 | 0.43 | 0.52 | 0.60 |
| Net Debt / EBITDA | -0.42 | -0.42 | 3.27 | 2.98 | 5.89 | 2.37 | 1.74 | 2.52 | 1.54 | 2.02 | 2.73 |
| Debt / FCF | — | -0.89 | 7.98 | 6.69 | 12.23 | 3.13 | 2.79 | 3.16 | 2.06 | 3.20 | 5.91 |
| Interest Coverage | 2.67 | 2.67 | 2.28 | 2.28 | 1.60 | 3.68 | 4.89 | 3.03 | 4.20 | 3.92 | 3.11 |
Net cash position: cash ($956M) exceeds total debt ($238M)
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 0.81 | 0.81 | 0.80 | 0.81 | 0.71 | 1.56 | 1.62 | 1.25 | 1.54 | 1.33 | 0.89 |
| Quick Ratio | 0.81 | 0.81 | 0.80 | 0.81 | 0.71 | 1.56 | 1.62 | 1.25 | 1.54 | 1.33 | 0.89 |
| Cash Ratio | 0.36 | 0.36 | 0.42 | 0.46 | 0.38 | 1.15 | 1.18 | 0.89 | 0.93 | 0.69 | 0.39 |
| Asset Turnover | — | 0.40 | 0.38 | 0.40 | 0.27 | 0.34 | 0.37 | 0.30 | 0.37 | 0.35 | 0.31 |
| Inventory Turnover | — | — | — | — | — | — | — | — | — | — | — |
| Days Sales Outstanding | — | 56.42 | 59.77 | 48.16 | 66.19 | 50.06 | 51.63 | 66.34 | 65.70 | 72.99 | 74.63 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | 4.7% | 4.9% | 3.5% | 3.3% | 2.3% | 2.3% | 1.5% | 1.6% | 1.5% | 1.5% | 1.5% |
| Payout Ratio | 41.7% | 41.7% | 62.3% | 58.1% | 170.8% | 60.9% | 65.4% | 81.7% | 58.4% | 62.3% | 11.5% |
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 11.2% | 11.6% | 5.7% | 5.7% | 1.3% | 3.8% | 2.3% | 2.0% | 2.6% | 2.6% | 12.7% |
| FCF Yield | 14.4% | 14.6% | 8.9% | 9.9% | 5.8% | 8.6% | 5.8% | 7.6% | 7.3% | 6.4% | 4.5% |
| Buyback Yield | 8.4% | 8.5% | 7.1% | 2.5% | 0.2% | 2.8% | 1.3% | 0.1% | 0.2% | 0.0% | 0.1% |
| Total Shareholder Yield | 13.0% | 13.4% | 10.6% | 5.7% | 2.5% | 5.1% | 2.8% | 1.7% | 1.8% | 1.5% | 1.6% |
| Shares Outstanding | — | $249M | $264M | $273M | $270M | $272M | $273M | $272M | $270M | $267M | $256M |
Includes 30+ ratios · 30 years · Updated daily
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Quick answers to the most common questions about buying OTEX stock.
Open Text Corporation's current P/E ratio is 8.9x. The historical average is 36.1x. This places it at the 7th percentile of its historical range.
Open Text Corporation's current EV/EBITDA is 2.9x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 11.9x.
Open Text Corporation's return on equity (ROE) is 16.2%. The historical average is 6.7%.
Based on historical data, Open Text Corporation is trading at a P/E of 8.9x. This is at the 7th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
Open Text Corporation's current dividend yield is 4.66% with a payout ratio of 41.7%.
Open Text Corporation has 73.7% gross margin and 20.6% operating margin. Operating margin above 20% indicates strong pricing power and cost efficiency.
Open Text Corporation's Debt/EBITDA ratio is 0.1x, indicating low leverage. A ratio below 2x is generally considered financially healthy.
Key Metrics
Top Statement Risk
M&A integration and debt
Metrics are mathematically derived from official filings.
Deep Value or Value Trap?
OTEX trades at a P/E of 9.5 and EV/EBITDA of 3.1, far below MSFT and IBM, suggesting the market prices in stagnation despite a PEG of 0.56, per reported multiples.
The forward P/E of 5.9 implies the market expects earnings to nearly double, which seems inconsistent with the muted revenue growth of 1.5% YoY. The low EV/EBITDA relative to peers may reflect skepticism about the sustainability of EBITDA given acquisition-related amortization and integration risks. Investors should monitor whether the discount narrows as debt deleverages and organic growth stabilizes.
Margin Expansion Masks Revenue Stagnation
Gross margin improved from 63.0% to 73.7% over ten quarters, while operating margin rose to 20.6% in 2026Q4, as per financial statements, indicating a favorable mix shift and cost discipline.
The gross margin expansion suggests a shift toward higher-margin cloud and support revenue, but net margin volatility (2.2% to 18.2%) highlights the impact of one-time items and acquisition accounting. The recent EPS beat of $1.23 vs. $0.84 estimate may reflect operational leverage, but the lack of forward guidance raises questions about sustainability. True earning power is better measured by cash flow, which has consistently exceeded net income.
ROIC Recovery After Integration Dip
ROIC improved from 1.6% in 2024Q3 to 8.9% in 2026Q4, as reported, suggesting the Micro Focus integration is yielding efficiency gains, though still below pre-acquisition levels.
The sharp recovery in ROIC from the trough of 1.6% indicates that cost synergies and asset rationalization are taking effect. However, ROE remains volatile, swinging from 0.7% to 16.1%, reflecting the lumpy nature of acquisition-related charges. The improvement is driven by margin expansion rather than asset turnover, which remains low at 0.40, underscoring the asset-heavy goodwill base. Investors should monitor whether ROIC can sustain above the cost of capital as integration completes.
Working Capital Efficiency Improves
DSO improved to 14 days in 2026Q4 from 50 days a year earlier, and DPO rose to 8 days, per reported figures, indicating tighter receivables management and better supplier terms.
The dramatic reduction in DSO suggests improved collection processes or a shift in revenue mix toward upfront billings, which may also explain the spike in contract assets. However, the cash conversion cycle remains negative due to negative DIO, which is typical for software with minimal inventory. The efficiency gains are positive but may be partly driven by one-time factors, so investors should watch for sustainability.
Deleveraging Progress but Debt Remains High
Debt-to-equity improved from 2.10 to 1.49 over ten quarters, and D/EBITDA fell to 3.53 in 2026Q4, as per balance sheet data, indicating steady deleveraging.
The reduction in leverage is encouraging, but total debt of $6.0B remains substantial relative to equity of $4.0B, and interest coverage of 3.67 is adequate but not comfortable. The D/EBITDA spike to 15.39 in 2026Q3 suggests quarterly volatility, possibly due to EBITDA fluctuations. The company's ability to service debt depends on stable cash flows, which have been robust, but the high payout ratio (dividends and buybacks exceeding FCF) limits flexibility for further deleveraging.
Thin Liquidity Buffer Under Stress
Current ratio remains below 1.0 at 0.81 in 2026Q4, with cash of $956M against total debt of $6.0B, as reported, indicating a tight liquidity position.
The current ratio has been consistently below 1.0, suggesting that current liabilities exceed current assets, which is typical for companies with strong cash flow generation but heavy debt. The quick ratio equals the current ratio, indicating minimal inventory reliance. Under a severe stress scenario, the company would rely on operating cash flow and refinancing capacity, which may be constrained by high leverage. Investors should monitor the maturity profile of the debt and the company's ability to refinance at reasonable rates.
Misapplied EV/EBITDA Multiple
EV/EBITDA is often used to value OTEX, but it ignores the heavy amortization of acquired intangibles, which distorts true cash earnings, as per reported figures.
The EV/EBITDA multiple of 3.1 appears extremely cheap, but EBITDA includes significant non-cash charges from acquisitions, making it an unreliable measure of sustainable earnings. A more appropriate metric is EV/EBIT or EV/Operating Cash Flow, which better captures the cash-generating ability of the business. Investors should adjust for acquisition-related amortization and one-time items to avoid overstating the value proposition.