Open Text repositions with Content Cloud focus, trades cheap despite profits, targets revenue growth by 2026.

Open Text Corporation is shifting its strategy around its Content Cloud and AI offerings, simplifying its business portfolio. Despite ongoing profitability, the company trades at distressed-level multiples. It is actively divesting non-core assets, reducing debt, buying back shares, and raising dividends. Content Cloud now makes up 43% of revenue and is growing 18% year-over-year. Management aims for 1-2% revenue growth by 2026, with upcoming Q3 earnings seen as a key catalyst. The current valuation appears overly pessimistic given the company's cash flow and strategic progress, making Open Text a Buy recommendation.