Open Text CorpOTEX · Nasdaq

Why the market may be pricing it low

• The company only now needs to redeploy capital from non-core assets to refocus on its core business, showing past acquisition-driven expansion became a burden.

  potential redeployment of capital from non-core assets to enhance focus on our core data management business as clients increasingly adopt AIMD&A

• The filing itself flags the impact of cash use and debt incurrence, including security interests tied to that debt, as a source of uncertainty.

  the actual and potential impacts of the use of cash and incurrence of indebtedness, including the granting of security interests related to such debtMD&A

• The company itself warns that rivals developing new AI technologies could render its products less competitive or obsolete, a lingering doubt about its legacy software positioning.

  if alternatives to our services and solutions, including new AI technologies, are developed by our competitors in times of rapid technological change, our software products and services could be rendered less competitive or obsoleteRisk factors

What could close the gap

• Completion of the non-core asset redeployment feeding into stronger shareholder returns could change the market's view of the company.

  potential redeployment of capital from non-core assets to enhance focus on our core data management business and support long-term shareholder returnsMD&A

• How the share repurchase plan fits into overall capital allocation strategy is disclosed, and its execution could mark a turning point in valuation.

  the expected impact of our share repurchase plan on our overall strategic capital allocationMD&A

• Multiple 2026 8-Ks under Item 5.02 (officer changes) suggest ongoing management turnover that could become a catalyst if it signals strategic change.

  2026-07-17 Item 5.02,8.01,9.01 / 2026-04-20 Item 5.02,9.01 / 2026-01-29 Item 5.02,9.018-K filings

How a buyer could still lose (value trap)

• Borrowings of $5.77B against just $956M cash mean net debt makes up nearly half of the $10.2B enterprise value, so any earnings slowdown would hit equity value disproportionately.

  Based on the figures below

• The company admits new R&D investments may never pay off, so it is plausible legacy business decline outpaces new AI-related investment returns.

  significant revenues from new software product and service investments may not be achieved for a number of years, if at allRisk factors

Financial quality (Piotroski F-score)

• ✓Profitable (ROA > 0)
• ✓Positive operating cash flow
• ✓ROA up on last year
• ✓Cash flow exceeds net profit
• ✓Leverage down on last year
• ✓Current ratio up on last year
• ✓No new shares issued
• –Gross margin up on last yearno data
• –Asset turnover up on last yearno data

Scored out of the checks with data, scaled to 9. Compares the latest year with the year before.

Figures

Sales

$2.8bn

Operating profit

$1.1bn

Net profit

$643m

Operating cash flow

$1.0bn

Cash

$956m

Debt

$5.8bn

Equity

$4.0bn

Latest twelve months to 2026-06-30; F-score for the fiscal year to 2026-06-30