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A virtually excellent Canadian inventory to purchase whereas it’s down has a easy recipe: the market will get grumpy, however the enterprise retains doing the boring, cash-generating work. You need recurring income, sticky clients, and a product that also issues even when budgets tighten. You additionally need administration that makes use of money correctly, like shopping for again shares and paying a dividend, as an alternative of chasing shiny distractions. When all of these line up, a drop in worth can look extra like a sale than a warning.

OTEX

On the floor, OpenText (TSX:OTEX) could not appear like it matches with its share worth up. However in the long run, traders nonetheless get worth. The tech inventory sells enterprise software program that helps massive organizations handle, safe, and use their info. It focuses on areas like content material administration, IT operations, buyer expertise instruments, and safety. This type of software program tends to embed itself into every day workflows, which makes clients much less more likely to rip it out shortly.

During the last yr, the storyline has been centered and simplified. OpenText labored to sharpen its portfolio and its message round info administration in a synthetic intelligence (AI)-heavy world, together with its Aviator AI choices. It has additionally been lively round divestitures and streamlining, which inserts the thought of trimming what’s non-core and placing extra consideration on merchandise that may scale profitably. Management additionally shifted, with Ayman Antoun entering into the CEO function, and the Canadian inventory framed that transition as regular reasonably than disruptive.

Valuation is the place the “virtually excellent whereas it’s down” pitch will get tempting. The market has priced OpenText extra like a mature, slower-growth software program firm than a fast-growth tech darling, which may make the shares look cheap relative to the money move profile. The chance is that development stays muted for longer than traders need, competitors stays intense, and clients take longer to modernize than the market’s endurance permits.

Earnings help

In its fiscal second quarter of 2026, OpenText reported complete income of $1.34 billion. Cloud revenues got here in at $478 million, up 3.4% yr over yr, and annual recurring revenues totalled $1.06 billion. It additionally posted quarterly enterprise cloud bookings of $295 million, up 18% yr over yr, which is a helpful sign that clients nonetheless signal new and increasing cloud offers.

Profitability stayed chunky. OpenText reported adjusted earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) of $491 million, which labored out to a 37.0% margin. Web revenue got here in at $168 million, and diluted earnings per share (EPS) have been $0.66 on a typically accepted accounting practices (GAAP) foundation and $1.13 on a non-GAAP foundation. Money move mattered, too. Working money move was $319 million, and free money move was $279 million within the quarter. That’s the sort of money technology that makes a buy-and-hold story really feel actual, even when the market stays unimpressed for some time.

Trying forward, the outlook hinges on execution, not buzzwords. OpenText must hold shifting clients to cloud subscriptions, hold bookings wholesome, and make its AI positioning really feel tangible in outcomes. Capital allocation additionally issues lots right here. In February 2026, the Canadian inventory elevated its fiscal 2026 share-repurchase program to US$500 million, and stated it already bought about US$190 million of shares for cancellation as of Jan. 31, 2026. If the Canadian inventory can hold shopping for again shares whereas sustaining monetary flexibility, long-term holders can profit even in periods when the inventory feels caught.

Backside line

In the long run, OpenText can look virtually excellent whereas it’s down if you would like a Canadian tech title with actual money move, recurring income, and administration leaning into buybacks and portfolio focus. In the meantime, traders nonetheless get a strong 4.41% dividend {that a} $7,000 funding turns into chilly, onerous money.

In case you might be affected person and also you desire a regular compounder reasonably than a headline inventory, OTEX has a reputable “purchase and maintain ceaselessly” angle when the worth feels on sale.