Q3 earnings and guidance keep Open Text (OTEX) in focus

Recent attention on Open Text (OTEX) has centered on its third quarter 2026 results and the decision to maintain full year earnings guidance, even after business divestitures and unusual expenses.

The company reported third quarter revenue of US$1,282.5 million, compared with US$1,254.36 million a year earlier, while net income was US$172.65 million, compared with US$92.81 million in the prior year period.

Basic and diluted earnings per share from continuing operations were US$0.70, compared with US$0.35 a year ago. For the first nine months of 2026, revenue was US$3,897.38 million, compared with US$3,857.87 million a year earlier.

Nine month net income reached US$487.36 million, compared with US$407.04 million in the same period a year ago, with basic and diluted earnings per share from continuing operations at US$1.94 versus just above US$1.50 previously.

At a share price of US$22.68, Open Text’s 1-day share price return of 1.30% followed a weaker run, with the stock down 7.77% over 90 days and year to date share price return down 28.54%. The 1-year total shareholder return has fallen 16.41% and the 5-year total shareholder return is down 42.79%, suggesting recent earnings resilience and affirmed guidance have not yet shifted overall sentiment.

If Q3 results have you reassessing the software space, this could be a good time to broaden your search and check out 63 profitable AI stocks that aren't just burning cash

With earnings guidance intact, a long stretch of weaker share price returns, and some valuation tools flagging a discount, the key question is simple: is Open Text now an overlooked value opportunity, or is the market already pricing in future growth?

Most Popular Narrative: 31.5% Undervalued

The most followed valuation narrative pegs Open Text's fair value at about $33.09, noticeably above the recent $22.68 share price, and frames that gap around longer term earnings power rather than short term trading moves.

Analysts expect earnings to reach $830.1 million (and earnings per share of $3.14) by about April 2029, up from $436.3 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $1.0 billion in earnings, and the most bearish expecting $715.4 million.

Want to see what sits underneath that earnings bridge, and how it links to cloud, AI and margins? The key assumptions might surprise you.

Result: Fair Value of $33.09 (UNDERVALUED)

However, this hinges on legacy maintenance decline being contained and restructuring delivering the planned cost savings, without integration or execution issues eroding those margin assumptions.

Next Steps

There are mixed signals regarding value and execution so far. If this has caught your attention, consider promptly reviewing the full picture and weighing the 4 key rewards and 1 important warning sign.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.