Is Now the Time to Buy This Top TSX Growth Stock?

OpenText has fallen hard from its highs, but the business is still generating cash, growing cloud revenue, and paying a hefty dividend.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published May 14, 3:45 pm EDT

| More on: OTEX

Key Points

A 52-week low can be a great buy only if the business is improving, not just the stock price.
OpenText is reshaping the company with a new CEO and asset sales while keeping cloud growth and margins strong.
At a low valuation with a big dividend, OTEX could reward patient investors if growth re-accelerates.

What’s better: a growth stock near a 52-week high, or one near a 52-week low as a buying opportunity? While both can make sense, both also can be quite risky and even terrifying. Yet when it comes to any scenario, the key is looking at whether the business can keep growing after the climb, or indeed the fall.

That’s why today we’re going to be looking at one growth stock that surged upwards, only to tumble by about 31% at writing year-to-date. So, let’s get right into it.

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor. — Source: Getty Images

OTEX

OpenText (TSX:OTEX) is a Waterloo-based software company focused on information management. It helps large organizations manage, secure, store, and use data across cloud, cybersecurity, artificial intelligence (AI), content, business networks, and IT operations. Since companies have more data than ever, and OpenText stock sells software that helps them make that data useful, secure, and easier to manage. This gives OpenText stock exposure to major themes like cloud migration, enterprise AI, cybersecurity, and digital transformation.

But that doesn’t mean this shift has been easy. In the last year, OpenText stock replaced its CEO with Ayman Antoun, who officially became chief executive officer on April 20, 2026. From there, OpenText stock completed the US$150 million sale of its non-core Vertica business to Rocket Software in May 2026. This supports a cleaner business focus and could help management put more attention on core growth areas.

Into earnings

Here’s the big question: do the numbers match up with the changes? OpenText stock reported Q3 fiscal 2026 revenue of US$1.3 billion, up 2.2% year over year. Cloud revenue rose 6.6% to US$493 million, marking 21 straight quarters of cloud organic growth. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) hit US$438 million, with a strong 34.1% adjusted EBITDA margin. So while this wasn’t explosive top-line growth, profits and cloud momentum improved.

These improvements could mean now is a great time to get in on OpenText stock. Right now, it trades at an incredible 11 times earnings with a dividend yield of 4.8%. That’s after the major drop of course. So while OpenText stock has been discounted for a reason with revenue growth remaining slow, once it can prove cloud growth, that stock price should accelerate once more.

Looking ahead

The growth looks likely, as management raised expectations for cloud revenue growth, enterprise cloud bookings, and free cash flow after Q3. OpenText stock expects fiscal 2026 free cash flow growth of 22% to 25% as well. Enterprise cloud bookings rose 29.6% year over year in Q3, and that gives investors a helpful indicator of future cloud demand.

In short, OpenText stock fits investors who want a beaten-down growth stock with income, not a high-flying momentum name. It offers recurring revenue, cloud growth, strong margins, buybacks, and a dividend yield that many tech stocks do not provide. Even that dividend can bring in ample income from a $7,000 investment.

COMPANY	RECENT PRICE	NUMBER OF SHARES	ANNUAL DIVIDEND	ANNUAL TOTAL PAYOUT	FREQUENCY	TOTAL INVESTMENT
OTEX	$31.25	224	$1.50	$336.00	Quarterly	$7,000.00

Bottom line

OpenText stock might be far lower than its recent highs, but that’s exactly why it could be a solid buy on the TSX today, precisely because the stock trades well below its 52-week high. While not risk-free, for patient investors looking for growth, income, and AI-linked software exposure, this TSX stock looks worth a close look before sentiment turns.