Intrinsic value of Open Text - OTEX

Previous Close

$37.91

  Intrinsic Value

$35.26

stock screener

  Rating & Target

hold

-7%

Previous close

$37.91

 
Intrinsic value

$35.26

 
Up/down potential

-7%

 
Rating

hold

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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  25.60
  25.60
  23.54
  21.69
  20.02
  18.52
  17.16
  15.95
  14.85
  13.87
  12.98
  12.18
  11.46
  10.82
  10.24
  9.71
  9.24
  8.82
  8.44
  8.09
  7.78
  7.50
  7.25
  7.03
  6.83
  6.64
  6.48
  6.33
  6.20
  6.08
  5.97
Revenue, $m
  2,291
  2,877
  3,555
  4,326
  5,192
  6,153
  7,209
  8,359
  9,600
  10,932
  12,351
  13,855
  15,444
  17,114
  18,866
  20,699
  22,611
  24,605
  26,681
  28,840
  31,084
  33,417
  35,841
  38,360
  40,978
  43,701
  46,532
  49,478
  52,545
  55,738
  59,066
Variable operating expenses, $m
 
  2,171
  2,567
  3,018
  3,524
  4,086
  4,703
  5,375
  6,101
  6,879
  7,709
  8,100
  9,028
  10,005
  11,029
  12,100
  13,219
  14,384
  15,598
  16,860
  18,172
  19,536
  20,953
  22,425
  23,956
  25,547
  27,203
  28,925
  30,718
  32,585
  34,530
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
  1,062
  2,171
  2,567
  3,018
  3,524
  4,086
  4,703
  5,375
  6,101
  6,879
  7,709
  8,100
  9,028
  10,005
  11,029
  12,100
  13,219
  14,384
  15,598
  16,860
  18,172
  19,536
  20,953
  22,425
  23,956
  25,547
  27,203
  28,925
  30,718
  32,585
  34,530
Operating income, $m
  1,229
  706
  988
  1,308
  1,668
  2,067
  2,506
  2,983
  3,499
  4,052
  4,642
  5,755
  6,415
  7,109
  7,837
  8,598
  9,393
  10,221
  11,083
  11,980
  12,912
  13,881
  14,888
  15,935
  17,022
  18,153
  19,329
  20,553
  21,827
  23,154
  24,536
EBITDA, $m
  1,575
  1,715
  2,118
  2,578
  3,094
  3,667
  4,296
  4,981
  5,721
  6,514
  7,360
  8,256
  9,203
  10,198
  11,242
  12,334
  13,474
  14,662
  15,899
  17,186
  18,523
  19,913
  21,358
  22,859
  24,419
  26,041
  27,728
  29,484
  31,311
  33,214
  35,197
Interest expense (income), $m
  115
  139
  194
  257
  329
  409
  499
  597
  704
  820
  944
  1,076
  1,217
  1,365
  1,520
  1,683
  1,854
  2,032
  2,218
  2,412
  2,613
  2,822
  3,039
  3,265
  3,500
  3,744
  3,997
  4,261
  4,536
  4,822
  5,119
Earnings before tax, $m
  1,126
  568
  794
  1,051
  1,339
  1,658
  2,007
  2,386
  2,795
  3,232
  3,697
  4,679
  5,199
  5,745
  6,317
  6,915
  7,539
  8,189
  8,865
  9,568
  10,300
  11,059
  11,849
  12,670
  13,523
  14,409
  15,332
  16,292
  17,291
  18,332
  19,417
Tax expense, $m
  100
  153
  214
  284
  362
  448
  542
  644
  755
  873
  998
  1,263
  1,404
  1,551
  1,706
  1,867
  2,035
  2,211
  2,394
  2,583
  2,781
  2,986
  3,199
  3,421
  3,651
  3,891
  4,140
  4,399
  4,669
  4,950
  5,243
Net income, $m
  1,026
  414
  580
  767
  978
  1,210
  1,465
  1,742
  2,040
  2,359
  2,699
  3,416
  3,795
  4,194
  4,611
  5,048
  5,503
  5,978
  6,471
  6,985
  7,519
  8,073
  8,650
  9,249
  9,872
  10,519
  11,192
  11,893
  12,623
  13,382
  14,174

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  443
  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
  7,481
  9,404
  11,617
  14,136
  16,966
  20,108
  23,559
  27,316
  31,373
  35,724
  40,361
  45,278
  50,469
  55,929
  61,654
  67,642
  73,894
  80,409
  87,192
  94,247
  101,582
  109,206
  117,127
  125,360
  133,917
  142,813
  152,066
  161,693
  171,714
  182,151
  193,026
Adjusted assets (=assets-cash), $m
  7,038
  9,404
  11,617
  14,136
  16,966
  20,108
  23,559
  27,316
  31,373
  35,724
  40,361
  45,278
  50,469
  55,929
  61,654
  67,642
  73,894
  80,409
  87,192
  94,247
  101,582
  109,206
  117,127
  125,360
  133,917
  142,813
  152,066
  161,693
  171,714
  182,151
  193,026
Revenue / Adjusted assets
  0.326
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
  0.306
Average production assets, $m
  1,265
  5,194
  6,417
  7,808
  9,371
  11,106
  13,012
  15,087
  17,328
  19,731
  22,293
  25,009
  27,876
  30,891
  34,053
  37,361
  40,814
  44,412
  48,159
  52,056
  56,107
  60,318
  64,693
  69,240
  73,966
  78,880
  83,990
  89,308
  94,843
  100,608
  106,614
Working capital, $m
  -124
  -429
  -530
  -645
  -774
  -917
  -1,074
  -1,245
  -1,430
  -1,629
  -1,840
  -2,064
  -2,301
  -2,550
  -2,811
  -3,084
  -3,369
  -3,666
  -3,975
  -4,297
  -4,632
  -4,979
  -5,340
  -5,716
  -6,106
  -6,511
  -6,933
  -7,372
  -7,829
  -8,305
  -8,801
Total debt, $m
  2,570
  3,587
  4,756
  6,086
  7,580
  9,239
  11,061
  13,045
  15,187
  17,485
  19,933
  22,529
  25,270
  28,153
  31,176
  34,337
  37,638
  41,078
  44,660
  48,385
  52,258
  56,283
  60,466
  64,812
  69,330
  74,027
  78,913
  83,996
  89,287
  94,798
  100,540
Total liabilities, $m
  3,948
  4,965
  6,134
  7,464
  8,958
  10,617
  12,439
  14,423
  16,565
  18,862
  21,311
  23,907
  26,648
  29,531
  32,553
  35,715
  39,016
  42,456
  46,037
  49,763
  53,635
  57,661
  61,843
  66,190
  70,708
  75,405
  80,291
  85,374
  90,665
  96,176
  101,918
Total equity, $m
  3,532
  4,438
  5,483
  6,672
  8,008
  9,491
  11,120
  12,893
  14,808
  16,862
  19,051
  21,371
  23,822
  26,399
  29,101
  31,927
  34,878
  37,953
  41,155
  44,485
  47,947
  51,545
  55,284
  59,170
  63,209
  67,408
  71,775
  76,319
  81,049
  85,975
  91,108
Total liabilities and equity, $m
  7,480
  9,403
  11,617
  14,136
  16,966
  20,108
  23,559
  27,316
  31,373
  35,724
  40,362
  45,278
  50,470
  55,930
  61,654
  67,642
  73,894
  80,409
  87,192
  94,248
  101,582
  109,206
  117,127
  125,360
  133,917
  142,813
  152,066
  161,693
  171,714
  182,151
  193,026
Debt-to-equity ratio
  0.728
  0.810
  0.870
  0.910
  0.950
  0.970
  0.990
  1.010
  1.030
  1.040
  1.050
  1.050
  1.060
  1.070
  1.070
  1.080
  1.080
  1.080
  1.090
  1.090
  1.090
  1.090
  1.090
  1.100
  1.100
  1.100
  1.100
  1.100
  1.100
  1.100
  1.100
Adjusted equity ratio
  0.439
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,026
  414
  580
  767
  978
  1,210
  1,465
  1,742
  2,040
  2,359
  2,699
  3,416
  3,795
  4,194
  4,611
  5,048
  5,503
  5,978
  6,471
  6,985
  7,519
  8,073
  8,650
  9,249
  9,872
  10,519
  11,192
  11,893
  12,623
  13,382
  14,174
Depreciation, amort., depletion, $m
  346
  1,008
  1,131
  1,270
  1,426
  1,600
  1,790
  1,998
  2,222
  2,462
  2,718
  2,501
  2,788
  3,089
  3,405
  3,736
  4,081
  4,441
  4,816
  5,206
  5,611
  6,032
  6,469
  6,924
  7,397
  7,888
  8,399
  8,931
  9,484
  10,061
  10,661
Funds from operations, $m
  337
  1,423
  1,710
  2,037
  2,404
  2,810
  3,255
  3,739
  4,262
  4,821
  5,417
  5,917
  6,583
  7,283
  8,017
  8,784
  9,585
  10,419
  11,287
  12,190
  13,129
  14,105
  15,119
  16,173
  17,268
  18,407
  19,591
  20,824
  22,107
  23,443
  24,836
Change in working capital, $m
  -102
  -87
  -101
  -115
  -129
  -143
  -157
  -171
  -185
  -198
  -211
  -224
  -237
  -249
  -261
  -273
  -285
  -297
  -309
  -322
  -334
  -348
  -361
  -375
  -390
  -406
  -422
  -439
  -457
  -476
  -496
Cash from operations, $m
  439
  1,510
  1,811
  2,152
  2,533
  2,953
  3,412
  3,911
  4,447
  5,020
  5,629
  6,141
  6,819
  7,532
  8,278
  9,057
  9,870
  10,716
  11,597
  12,512
  13,464
  14,453
  15,480
  16,548
  17,658
  18,813
  20,013
  21,263
  22,564
  23,919
  25,332
Maintenance CAPEX, $m
  0
  -414
  -519
  -642
  -781
  -937
  -1,111
  -1,301
  -1,509
  -1,733
  -1,973
  -2,229
  -2,501
  -2,788
  -3,089
  -3,405
  -3,736
  -4,081
  -4,441
  -4,816
  -5,206
  -5,611
  -6,032
  -6,469
  -6,924
  -7,397
  -7,888
  -8,399
  -8,931
  -9,484
  -10,061
New CAPEX, $m
  -80
  -1,058
  -1,223
  -1,391
  -1,563
  -1,735
  -1,906
  -2,075
  -2,241
  -2,403
  -2,561
  -2,716
  -2,867
  -3,016
  -3,162
  -3,307
  -3,453
  -3,599
  -3,746
  -3,897
  -4,051
  -4,211
  -4,375
  -4,547
  -4,726
  -4,914
  -5,111
  -5,317
  -5,535
  -5,765
  -6,007
Cash from investing activities, $m
  -2,191
  -1,472
  -1,742
  -2,033
  -2,344
  -2,672
  -3,017
  -3,376
  -3,750
  -4,136
  -4,534
  -4,945
  -5,368
  -5,804
  -6,251
  -6,712
  -7,189
  -7,680
  -8,187
  -8,713
  -9,257
  -9,822
  -10,407
  -11,016
  -11,650
  -12,311
  -12,999
  -13,716
  -14,466
  -15,249
  -16,068
Free cash flow, $m
  -1,752
  39
  69
  119
  189
  281
  396
  534
  697
  884
  1,094
  1,196
  1,451
  1,729
  2,026
  2,344
  2,681
  3,036
  3,409
  3,799
  4,207
  4,632
  5,073
  5,532
  6,008
  6,502
  7,015
  7,546
  8,098
  8,670
  9,264
Issuance/(repayment) of debt, $m
  424
  1,018
  1,169
  1,330
  1,494
  1,659
  1,822
  1,984
  2,142
  2,297
  2,448
  2,596
  2,741
  2,883
  3,023
  3,162
  3,301
  3,440
  3,581
  3,725
  3,873
  4,025
  4,183
  4,347
  4,518
  4,697
  4,885
  5,083
  5,291
  5,511
  5,742
Issuance/(repurchase) of shares, $m
  632
  491
  465
  422
  358
  273
  164
  32
  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  
  1,031
  1,509
  1,634
  1,752
  1,852
  1,932
  1,986
  2,016
  2,142
  2,297
  2,448
  2,596
  2,741
  2,883
  3,023
  3,162
  3,301
  3,440
  3,581
  3,725
  3,873
  4,025
  4,183
  4,347
  4,518
  4,697
  4,885
  5,083
  5,291
  5,511
  5,742
Total cash flow (excl. dividends), $m
  -719
  1,547
  1,703
  1,871
  2,041
  2,212
  2,382
  2,550
  2,839
  3,181
  3,543
  3,792
  4,192
  4,611
  5,049
  5,506
  5,981
  6,476
  6,990
  7,525
  8,080
  8,657
  9,256
  9,879
  10,526
  11,199
  11,900
  12,630
  13,389
  14,181
  15,006
Retained Cash Flow (-), $m
  -1,553
  -905
  -1,045
  -1,189
  -1,336
  -1,483
  -1,629
  -1,773
  -1,915
  -2,054
  -2,189
  -2,321
  -2,450
  -2,577
  -2,702
  -2,826
  -2,951
  -3,075
  -3,202
  -3,330
  -3,462
  -3,598
  -3,739
  -3,886
  -4,039
  -4,199
  -4,367
  -4,544
  -4,730
  -4,926
  -5,133
Prev. year cash balance distribution, $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 flow adjustment, $m
 
  30
  37
  46
  56
  67
  80
  94
  109
  125
  142
  161
  180
  201
  222
  245
  269
  294
  320
  347
  375
  404
  434
  466
  499
  533
  568
  605
  643
  683
  725
Cash available for distribution, $m
 
  642
  658
  682
  705
  729
  753
  776
  924
  1,127
  1,354
  1,471
  1,742
  2,034
  2,347
  2,679
  3,031
  3,401
  3,789
  4,194
  4,618
  5,058
  5,517
  5,993
  6,487
  7,000
  7,533
  8,085
  8,659
  9,255
  9,873
Discount rate, %
 
  6.20
  6.51
  6.84
  7.18
  7.54
  7.91
  8.31
  8.72
  9.16
  9.62
  10.10
  10.60
  11.13
  11.69
  12.28
  12.89
  13.53
  14.21
  14.92
  15.67
  16.45
  17.27
  18.14
  19.04
  20.00
  21.00
  22.05
  23.15
  24.30
  25.52
PV of cash for distribution, $m
 
  604
  580
  559
  535
  507
  477
  444
  473
  512
  540
  510
  520
  516
  499
  472
  436
  393
  347
  299
  251
  207
  166
  130
  99
  73
  53
  37
  25
  17
  11
Current shareholders' claim on cash, %
  100
  95.1
  91.6
  89.1
  87.4
  86.3
  85.8
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7
  85.7

Open Text Corporation provides a platform and suite of software products and services that assist organizations in finding, utilizing, and sharing business information from any device. The Company designs, develops, markets and sells Enterprise Information Management (EIM) software and solutions. Its EIM offerings include Enterprise Content Management (ECM), Business Process Management (BPM), Customer Experience Management (CEM), Business Network, Discovery and Analytics. Its software and services allow organizations to manage the information that flows into, out of, and throughout the enterprise as part of daily operations. Its solutions incorporate collaborative and mobile technologies and are delivered for on-premises deployment, as well as through cloud, hybrid and managed hosted services models. In addition, the Company provides solutions that facilitate the exchange of information and transactions that occur between supply chain participants.

FINANCIAL RATIOS  of  Open Text (OTEX)

Valuation Ratios
P/E Ratio 9.8
Price to Sales 4.4
Price to Book 2.8
Price to Tangible Book
Price to Cash Flow 22.8
Price to Free Cash Flow 27.9
Growth Rates
Sales Growth Rate 25.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 14.3%
Cap. Spend. - 3 Yr. Gr. Rate 13.8%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 67.6%
Total Debt to Equity 72.8%
Interest Coverage 11
Management Effectiveness
Return On Assets 17.9%
Ret/ On Assets - 3 Yr. Avg. 10.6%
Return On Total Capital 20.1%
Ret/ On T. Cap. - 3 Yr. Avg. 11.7%
Return On Equity 37.2%
Return On Equity - 3 Yr. Avg. 21.9%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 66.7%
Gross Margin - 3 Yr. Avg. 67.7%
EBITDA Margin 69.3%
EBITDA Margin - 3 Yr. Avg. 43.9%
Operating Margin 53.6%
Oper. Margin - 3 Yr. Avg. 30.9%
Pre-Tax Margin 49.1%
Pre-Tax Margin - 3 Yr. Avg. 26.5%
Net Profit Margin 44.8%
Net Profit Margin - 3 Yr. Avg. 24.3%
Effective Tax Rate 8.9%
Eff/ Tax Rate - 3 Yr. Avg. 7.7%
Payout Ratio 11.8%

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 $2291 million for the last fiscal year's total revenue generated by Open Text. The default revenue input number comes from 2017 income statement of Open Text. 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 25.6% 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 6.2%, whose default value for OTEX is calculated based on our internal credit rating of Open Text, 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.
    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 79.8%.

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 5.4% for Open Text.

Corporate tax rate of 27% is the nominal tax rate for Open Text. 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 1.3%.

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 180.5%.

Life of production assets of 10 years is the average useful life of capital assets used in Open Text 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 -14.9%. 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 - $3533 million for Open Text - 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 254 million for Open Text 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 at the current share price and the inputted number of shares is $9.6 billion.

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COMPANY NEWS

▶ Open Text: Fiscal 3Q Earnings Snapshot   [May-09-18 05:01PM  Associated Press]
▶ Open Text's stock drops on earnings miss   [04:44PM  MarketWatch]
▶ File-sharing pioneer once known as YouSendIt acquired by OpenText   [Feb-15-18 10:14AM  American City Business Journals]
▶ OpenText Acquires Hightail   [09:00AM  PR Newswire]
▶ OpenText Acquires Hightail   [09:00AM  CNW Group]
▶ Why Shares of Open Text Are Surging Today   [Feb-01-18 01:01PM  Motley Fool]
▶ Revenue Gains Accelerate at OpenText   [Jan-31-18 07:45PM  Motley Fool]
▶ Open Text posts 2Q profit   [04:38PM  Associated Press]
▶ ETFs with exposure to Open Text Corp. : December 29, 2017   [Dec-29-17 12:24PM  Capital Cube]
▶ OpenText Added to S&P/TSX60 Index   [09:00AM  PR Newswire]
▶ Stocks Hold Modest Gains; Netflix Snaps Back; Bitcoin Volatile As Ever   [Dec-28-17 01:35PM  Investor's Business Daily]
▶ ETFs with exposure to Open Text Corp. : December 12, 2017   [Dec-12-17 01:53PM  Capital Cube]
▶ OpenText Expands Operations in India   [Dec-04-17 09:00AM  PR Newswire]
▶ Lycamobile Builds New Digital Back Office with OpenText   [Nov-28-17 09:00AM  PR Newswire]
▶ OpenText Joins Dell EMC Select Partner Program   [Nov-16-17 09:00AM  PR Newswire]
▶ OpenText Turns Customer Support Needs Into Faster Growth   [Nov-03-17 12:46PM  Motley Fool]
▶ Open Text beats 1Q profit forecasts   [Nov-02-17 04:45PM  Associated Press]
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.

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