Intrinsic value of Open Text Corporation - OTEX

Previous Close

$42.86

  Intrinsic Value

$279.20

stock screener

  Rating & Target

str. buy

+551%

  Value-price divergence*

0%

Previous close

$42.86

 
Intrinsic value

$279.20

 
Up/down potential

+551%

 
Rating

str. buy

 
Value-price divergence*

0%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of OTEX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 11.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -1.48
  34.60
  31.64
  28.98
  26.58
  24.42
  22.48
  20.73
  19.16
  17.74
  16.47
  15.32
  14.29
  13.36
  12.52
  11.77
  11.09
  10.48
  9.94
  9.44
  9.00
  8.60
  8.24
  7.91
  7.62
  7.36
  7.12
  6.91
  6.72
  6.55
  6.39
Revenue, $m
  2,465
  3,318
  4,368
  5,633
  7,130
  8,872
  10,866
  13,119
  15,632
  18,405
  21,436
  24,720
  28,253
  32,027
  36,038
  40,280
  44,749
  49,441
  54,354
  59,486
  64,839
  70,414
  76,216
  82,248
  88,518
  95,034
  101,805
  108,843
  116,158
  123,766
  131,679
Variable operating expenses, $m
 
  2,585
  3,304
  4,170
  5,195
  6,387
  7,752
  9,294
  11,015
  12,913
  14,988
  16,922
  19,340
  21,924
  24,669
  27,573
  30,632
  33,844
  37,207
  40,720
  44,385
  48,201
  52,172
  56,302
  60,594
  65,054
  69,689
  74,507
  79,514
  84,722
  90,139
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  1,967
  2,585
  3,304
  4,170
  5,195
  6,387
  7,752
  9,294
  11,015
  12,913
  14,988
  16,922
  19,340
  21,924
  24,669
  27,573
  30,632
  33,844
  37,207
  40,720
  44,385
  48,201
  52,172
  56,302
  60,594
  65,054
  69,689
  74,507
  79,514
  84,722
  90,139
Operating income, $m
  498
  732
  1,064
  1,463
  1,935
  2,485
  3,114
  3,824
  4,617
  5,492
  6,448
  7,798
  8,913
  10,103
  11,369
  12,707
  14,117
  15,597
  17,147
  18,766
  20,454
  22,213
  24,043
  25,946
  27,924
  29,980
  32,116
  34,336
  36,644
  39,044
  41,540
EBITDA, $m
  825
  1,166
  1,535
  1,980
  2,506
  3,118
  3,819
  4,611
  5,494
  6,468
  7,534
  8,688
  9,929
  11,256
  12,666
  14,156
  15,727
  17,376
  19,103
  20,906
  22,788
  24,747
  26,786
  28,906
  31,110
  33,400
  35,779
  38,253
  40,824
  43,497
  46,279
Interest expense (income), $m
  97
  113
  170
  241
  327
  428
  546
  681
  834
  1,004
  1,192
  1,397
  1,619
  1,858
  2,114
  2,385
  2,672
  2,975
  3,293
  3,625
  3,973
  4,335
  4,712
  5,105
  5,513
  5,938
  6,379
  6,837
  7,314
  7,809
  8,324
Earnings before tax, $m
  393
  620
  893
  1,222
  1,608
  2,056
  2,567
  3,143
  3,783
  4,488
  5,257
  6,402
  7,294
  8,245
  9,255
  10,322
  11,444
  12,622
  13,854
  15,141
  16,482
  17,878
  19,331
  20,841
  22,411
  24,042
  25,737
  27,499
  29,330
  31,235
  33,216
Tax expense, $m
  9
  167
  241
  330
  434
  555
  693
  849
  1,021
  1,212
  1,419
  1,728
  1,969
  2,226
  2,499
  2,787
  3,090
  3,408
  3,741
  4,088
  4,450
  4,827
  5,219
  5,627
  6,051
  6,491
  6,949
  7,425
  7,919
  8,433
  8,968
Net income, $m
  384
  452
  652
  892
  1,174
  1,501
  1,874
  2,294
  2,762
  3,276
  3,837
  4,673
  5,324
  6,019
  6,756
  7,535
  8,354
  9,214
  10,114
  11,053
  12,032
  13,051
  14,112
  15,214
  16,360
  17,551
  18,788
  20,074
  21,411
  22,801
  24,248

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,750
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  6,964
  7,015
  9,234
  11,910
  15,075
  18,756
  22,973
  27,735
  33,048
  38,912
  45,319
  52,263
  59,731
  67,710
  76,190
  85,159
  94,607
  104,527
  114,913
  125,764
  137,081
  148,868
  161,133
  173,886
  187,142
  200,918
  215,234
  230,111
  245,578
  261,661
  278,392
Adjusted assets (=assets-cash), $m
  5,214
  7,015
  9,234
  11,910
  15,075
  18,756
  22,973
  27,735
  33,048
  38,912
  45,319
  52,263
  59,731
  67,710
  76,190
  85,159
  94,607
  104,527
  114,913
  125,764
  137,081
  148,868
  161,133
  173,886
  187,142
  200,918
  215,234
  230,111
  245,578
  261,661
  278,392
Revenue / Adjusted assets
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
Average production assets, $m
  1,128
  1,516
  1,996
  2,574
  3,259
  4,054
  4,966
  5,995
  7,144
  8,411
  9,796
  11,297
  12,911
  14,636
  16,469
  18,408
  20,450
  22,595
  24,840
  27,185
  29,632
  32,179
  34,831
  37,587
  40,453
  43,431
  46,525
  49,741
  53,084
  56,561
  60,178
Working capital, $m
  1,352
  -521
  -686
  -884
  -1,119
  -1,393
  -1,706
  -2,060
  -2,454
  -2,890
  -3,365
  -3,881
  -4,436
  -5,028
  -5,658
  -6,324
  -7,026
  -7,762
  -8,534
  -9,339
  -10,180
  -11,055
  -11,966
  -12,913
  -13,897
  -14,920
  -15,983
  -17,088
  -18,237
  -19,431
  -20,674
Total debt, $m
  2,899
  4,367
  6,189
  8,386
  10,985
  14,007
  17,468
  21,378
  25,741
  30,554
  35,815
  41,516
  47,647
  54,198
  61,160
  68,524
  76,280
  84,424
  92,951
  101,860
  111,151
  120,829
  130,898
  141,369
  152,252
  163,562
  175,315
  187,530
  200,227
  213,432
  227,168
Total liabilities, $m
  4,290
  5,759
  7,581
  9,778
  12,377
  15,399
  18,860
  22,770
  27,133
  31,946
  37,207
  42,908
  49,039
  55,590
  62,552
  69,916
  77,672
  85,816
  94,343
  103,252
  112,543
  122,221
  132,290
  142,761
  153,644
  164,954
  176,707
  188,922
  201,619
  214,824
  228,560
Total equity, $m
  2,673
  1,256
  1,653
  2,132
  2,698
  3,357
  4,112
  4,965
  5,916
  6,965
  8,112
  9,355
  10,692
  12,120
  13,638
  15,244
  16,935
  18,710
  20,569
  22,512
  24,537
  26,647
  28,843
  31,126
  33,498
  35,964
  38,527
  41,190
  43,958
  46,837
  49,832
Total liabilities and equity, $m
  6,963
  7,015
  9,234
  11,910
  15,075
  18,756
  22,972
  27,735
  33,049
  38,911
  45,319
  52,263
  59,731
  67,710
  76,190
  85,160
  94,607
  104,526
  114,912
  125,764
  137,080
  148,868
  161,133
  173,887
  187,142
  200,918
  215,234
  230,112
  245,577
  261,661
  278,392
Debt-to-equity ratio
  1.085
  3.480
  3.740
  3.930
  4.070
  4.170
  4.250
  4.310
  4.350
  4.390
  4.410
  4.440
  4.460
  4.470
  4.480
  4.500
  4.500
  4.510
  4.520
  4.520
  4.530
  4.530
  4.540
  4.540
  4.550
  4.550
  4.550
  4.550
  4.550
  4.560
  4.560
Adjusted equity ratio
  0.177
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  384
  452
  652
  892
  1,174
  1,501
  1,874
  2,294
  2,762
  3,276
  3,837
  4,673
  5,324
  6,019
  6,756
  7,535
  8,354
  9,214
  10,114
  11,053
  12,032
  13,051
  14,112
  15,214
  16,360
  17,551
  18,788
  20,074
  21,411
  22,801
  24,248
Depreciation, amort., depletion, $m
  327
  434
  471
  517
  571
  633
  705
  786
  877
  976
  1,086
  890
  1,017
  1,152
  1,297
  1,449
  1,610
  1,779
  1,956
  2,141
  2,333
  2,534
  2,743
  2,960
  3,185
  3,420
  3,663
  3,917
  4,180
  4,454
  4,738
Funds from operations, $m
  720
  886
  1,124
  1,409
  1,745
  2,134
  2,579
  3,081
  3,639
  4,253
  4,923
  5,563
  6,341
  7,171
  8,053
  8,984
  9,965
  10,993
  12,069
  13,193
  14,365
  15,585
  16,854
  18,174
  19,545
  20,970
  22,451
  23,991
  25,591
  27,255
  28,986
Change in working capital, $m
  10
  -134
  -165
  -199
  -235
  -273
  -313
  -354
  -395
  -435
  -476
  -516
  -555
  -593
  -630
  -666
  -702
  -737
  -771
  -806
  -840
  -875
  -911
  -947
  -984
  -1,023
  -1,063
  -1,105
  -1,149
  -1,194
  -1,242
Cash from operations, $m
  710
  1,020
  1,288
  1,607
  1,980
  2,408
  2,892
  3,434
  4,033
  4,688
  5,399
  6,078
  6,896
  7,764
  8,683
  9,650
  10,666
  11,730
  12,841
  13,999
  15,205
  16,460
  17,765
  19,121
  20,530
  21,993
  23,515
  25,096
  26,739
  28,449
  30,229
Maintenance CAPEX, $m
  0
  -89
  -119
  -157
  -203
  -257
  -319
  -391
  -472
  -562
  -662
  -771
  -890
  -1,017
  -1,152
  -1,297
  -1,449
  -1,610
  -1,779
  -1,956
  -2,141
  -2,333
  -2,534
  -2,743
  -2,960
  -3,185
  -3,420
  -3,663
  -3,917
  -4,180
  -4,454
New CAPEX, $m
  -95
  -389
  -480
  -578
  -684
  -796
  -911
  -1,029
  -1,149
  -1,267
  -1,385
  -1,501
  -1,614
  -1,725
  -1,833
  -1,939
  -2,042
  -2,144
  -2,245
  -2,346
  -2,446
  -2,548
  -2,651
  -2,757
  -2,865
  -2,978
  -3,094
  -3,216
  -3,343
  -3,477
  -3,617
Cash from investing activities, $m
  -488
  -478
  -599
  -735
  -887
  -1,053
  -1,230
  -1,420
  -1,621
  -1,829
  -2,047
  -2,272
  -2,504
  -2,742
  -2,985
  -3,236
  -3,491
  -3,754
  -4,024
  -4,302
  -4,587
  -4,881
  -5,185
  -5,500
  -5,825
  -6,163
  -6,514
  -6,879
  -7,260
  -7,657
  -8,071
Free cash flow, $m
  222
  542
  689
  872
  1,093
  1,355
  1,662
  2,014
  2,413
  2,858
  3,351
  3,806
  4,392
  5,022
  5,697
  6,415
  7,175
  7,975
  8,816
  9,698
  10,619
  11,579
  12,580
  13,622
  14,705
  15,830
  17,000
  18,216
  19,480
  20,793
  22,159
Issuance/(repayment) of debt, $m
  800
  1,479
  1,822
  2,197
  2,599
  3,022
  3,461
  3,910
  4,362
  4,814
  5,261
  5,700
  6,131
  6,552
  6,962
  7,363
  7,757
  8,144
  8,527
  8,909
  9,291
  9,677
  10,070
  10,471
  10,883
  11,310
  11,753
  12,215
  12,698
  13,204
  13,736
Issuance/(repurchase) of shares, $m
  -76
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  715
  1,479
  1,822
  2,197
  2,599
  3,022
  3,461
  3,910
  4,362
  4,814
  5,261
  5,700
  6,131
  6,552
  6,962
  7,363
  7,757
  8,144
  8,527
  8,909
  9,291
  9,677
  10,070
  10,471
  10,883
  11,310
  11,753
  12,215
  12,698
  13,204
  13,736
Total cash flow (excl. dividends), $m
  923
  2,021
  2,511
  3,068
  3,692
  4,378
  5,123
  5,924
  6,775
  7,672
  8,612
  9,507
  10,523
  11,574
  12,659
  13,778
  14,931
  16,119
  17,344
  18,606
  19,910
  21,256
  22,650
  24,092
  25,588
  27,140
  28,753
  30,431
  32,177
  33,997
  35,895
Retained Cash Flow (-), $m
  -201
  -322
  -397
  -479
  -567
  -659
  -755
  -852
  -951
  -1,050
  -1,147
  -1,243
  -1,337
  -1,428
  -1,518
  -1,605
  -1,691
  -1,776
  -1,859
  -1,942
  -2,026
  -2,110
  -2,195
  -2,283
  -2,373
  -2,466
  -2,562
  -2,663
  -2,768
  -2,879
  -2,995
Prev. year cash balance distribution, $m
 
  1,739
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  3,439
  2,114
  2,590
  3,125
  3,719
  4,369
  5,071
  5,824
  6,623
  7,465
  8,264
  9,186
  10,146
  11,141
  12,173
  13,240
  14,344
  15,484
  16,664
  17,884
  19,147
  20,454
  21,809
  23,215
  24,674
  26,191
  27,768
  29,409
  31,118
  32,900
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  3,297
  1,935
  2,254
  2,573
  2,883
  3,171
  3,426
  3,640
  3,804
  3,914
  3,924
  3,920
  3,858
  3,740
  3,574
  3,365
  3,121
  2,852
  2,566
  2,273
  1,980
  1,697
  1,429
  1,182
  960
  764
  596
  455
  340
  248
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

FINANCIAL RATIOS  of  Open Text Corporation (OTEX)

Valuation Ratios
P/E Ratio 27.1
Price to Sales 4.2
Price to Book 3.9
Price to Tangible Book
Price to Cash Flow 14.7
Price to Free Cash Flow 16.9
Growth Rates
Sales Growth Rate -1.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -8.7%
Cap. Spend. - 3 Yr. Gr. Rate 25.1%
Financial Strength
Quick Ratio 159
Current Ratio 0
LT Debt to Equity 108%
Total Debt to Equity 108.5%
Interest Coverage 5
Management Effectiveness
Return On Assets 7.5%
Ret/ On Assets - 3 Yr. Avg. 7.1%
Return On Total Capital 7.6%
Ret/ On T. Cap. - 3 Yr. Avg. 8%
Return On Equity 14.9%
Return On Equity - 3 Yr. Avg. 14.4%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 68.5%
Gross Margin - 3 Yr. Avg. 68.3%
EBITDA Margin 33.1%
EBITDA Margin - 3 Yr. Avg. 30.8%
Operating Margin 20.2%
Oper. Margin - 3 Yr. Avg. 19.2%
Pre-Tax Margin 15.9%
Pre-Tax Margin - 3 Yr. Avg. 15.8%
Net Profit Margin 15.6%
Net Profit Margin - 3 Yr. Avg. 13.9%
Effective Tax Rate 2.3%
Eff/ Tax Rate - 3 Yr. Avg. 11.7%
Payout Ratio 34.9%

OTEX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the OTEX stock intrinsic value calculation we used $2465 million for the last fiscal year's total revenue generated by Open Text Corporation. The default revenue input number comes from 2016 income statement of Open Text Corporation. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our OTEX stock valuation model: a) initial revenue growth rate of 34.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for OTEX is calculated based on our internal credit rating of Open Text Corporation, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Open Text Corporation.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of OTEX stock the variable cost ratio is equal to 81.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for OTEX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.9% for Open Text Corporation.

Corporate tax rate of 27% is the nominal tax rate for Open Text Corporation. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the OTEX stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for OTEX are equal to 45.7%.

Life of production assets of 12.7 years is the average useful life of capital assets used in Open Text Corporation operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for OTEX is equal to -15.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2673 million for Open Text Corporation - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 265.967 million for Open Text Corporation is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Open Text Corporation at the current share price and the inputted number of shares is $11.4 billion.

RELATED COMPANIES Price Int.Val. Rating
ENGH Enghouse Syste 54.33 55.38  hold
CSU Constellation 696.57 693.56  hold
DSG Descartes Syst 31.69 6.43  str.sell
CBX Cortex Busines 4.20 0.17  str.sell
CAE CAE Inc. 21.33 18.36  hold
BB BlackBerry Lim 12.30 1.90  str.sell
Stock chart of OTEX Financial statements of OTEX
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.