OpenText's Largest Investor Supports Board's Decision to Fire CEO

OpenText's largest investor, Jarislowsky Fraser Ltd., supports the board's decision to fire CEO Mark Barrenechea. The company believes the change will accelerate the optimization of its portfolio and improve transparency in performance. Jarislowsky owns an 8.5% stake in OpenText, which is undervalued given its leading position in enterprise content management. The departure of Barrenechea and CFO Chadwick Westlake raises concerns about the company's execution efforts.

OpenText Corp.'s largest investor, Jarislowsky Fraser Ltd., a subsidiary of Bank of Nova Scotia, has expressed support for the company's board of directors' decision to oust long-time CEO Mark Barrenechea. The move follows a month after the departure of CFO Chadwick Westlake, who returned to EQB Inc. as CEO following the death of former executive Andrew Moor [1].

Jarislowsky's head of research, Charles Nadim, stated that the change is expected to accelerate the optimization of OpenText's portfolio and improve transparency in performance. He believes the company is significantly undervalued given its leading position in enterprise content management and well-positioned to leverage AI for organic growth [1].

The departure of Barrenechea and Westlake has raised concerns about the company's execution efforts. Bloomberg Intelligence analyst Sunil Rajgopal noted that the leadership reshuffle signals ongoing execution challenges and affirms caution about the company's ability to drive positive organic growth as competition and the innovation race accelerate [1].

OpenText's AI-first strategy, which includes the Titanium X cloud platform and Cybersecurity Aviator, has been recognized by UBS, which recently raised its price target to $32, reflecting the company's potential in cloud computing and AI integration [2]. Despite a 13.3% revenue decline in 2025, OpenText maintains a 31.5% adjusted EBITDA margin and has achieved $550 million in annual cost savings through AI automation initiatives [2].

The company's valuation appears disconnected from the premium multiples seen in AI-driven content management. While peers like Adobe command higher valuations, OpenText trades at a discount. However, its $10 billion total addressable market in AI-driven enterprise solutions suggests untapped potential [2].

National Bank of Canada Financial Markets analyst Richard Tse maintains a "Sector Perform" rating and a $34.00 target on the stock, citing the company's stabilizing business following a challenging fiscal year. He expects 1-2% constant currency revenue growth in FY26, with 3-4% growth in cloud revenue [3].

In conclusion, OpenText's current valuation offers a compelling entry point for investors seeking exposure to the AI-driven content management space, particularly if the company can accelerate its AI monetization and demonstrate growth in cloud revenue. The company's strategic positioning in high-margin, regulated industries suggests long-term potential.

References:
[1] https://www.bloomberg.com/news/articles/2025-08-14/opentext-s-largest-investor-backs-board-s-decision-to-fire-ceo-mebfic0m
[2] https://www.ainvest.com/news/opentext-rating-potential-strategic-play-ai-driven-enterprise-software-2508/
[3] https://www.cantechletter.com/2025/08/is-opentext-stock-undervalued/