UPDATE: BMO Capital Markets Reiterates on Open Text Following Mixed Q1/14 Results
In a report published Thursday, BMO Capital Markets analyst Thanos Moschopoulos reiterated a Market Perform rating on Open Text (NASDAQ: OTEX), but lowered the price target from $82.00 to $74.00.
In the report, BMO Capital Markets noted, “Open Text reported Q1/14 results. Revenues were $324.5 million, below the consensus of $333.9 million, with the shortfall due to soft licenses and professional service revenue. Licenses revenues were $55.3 million (we believe the consensus was $60-61 million). Both total revenues and license revenues were roughly flat y/y on a reported basis, and (by our math) down 3% y/y on an organic constant currency basis. Management blamed the shortfall squarely on the macro uncertainty related to the government shutdown. Despite the revenue miss, adj. EPS of $1.37 (or $1.34 excluding a one-time item) exceeded the consensus of $1.30, on higher margins and lower opex.”
Open Text closed on Wednesday at $75.10.
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