Kyndryl (NYSE:KD) vs. Open Text (NASDAQ:OTEX) Financial Survey

Open Text (NASDAQ:OTEX) and Kyndryl (NYSE:KD) are both mid-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Earnings & Valuation

This table compares Open Text and Kyndryl”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Open Text	$5.77 billion	1.41	$465.09 million	$1.73	17.68
Kyndryl	$15.30 billion	0.53	-$340.00 million	($0.39)	-89.28

Open Text has higher earnings, but lower revenue than Kyndryl. Kyndryl is trading at a lower price-to-earnings ratio than Open Text, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Open Text and Kyndryl’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Open Text	8.35%	24.34%	6.60%
Kyndryl	-0.58%	-4.09%	-0.46%

Analyst Ratings

This is a breakdown of recent recommendations for Open Text and Kyndryl, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Open Text	0	8	3	0	2.27
Kyndryl	0	0	6	0	3.00

Open Text currently has a consensus target price of $35.90, indicating a potential upside of 17.36%. Kyndryl has a consensus target price of $33.00, indicating a potential downside of 5.23%. Given Open Text’s higher possible upside, equities research analysts plainly believe Open Text is more favorable than Kyndryl.

Institutional & Insider Ownership

70.4% of Open Text shares are held by institutional investors. Comparatively, 71.5% of Kyndryl shares are held by institutional investors. 10.6% of Open Text shares are held by insiders. Comparatively, 1.0% of Kyndryl shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Open Text has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, Kyndryl has a beta of 1.63, indicating that its share price is 63% more volatile than the S&P 500.

Summary

Open Text beats Kyndryl on 9 of the 14 factors compared between the two stocks.

About Open Text

Open Text Corporation provides information management software and solutions. The company offers content services, which includes content collaboration and intelligent capture to records management, collaboration, e-signatures, and archiving; and operates experience cloud platform that provides customer experience and web content management, digital asset management, customer analytics, AI and insights, e-discovery, digital fax, omnichannel communications, secure messaging, and voice of customer, as well as customer journey, testing, and segmentation. It also provides cybersecurity cloud solutions to protect, prevent, detect, respond and quickly recover from threats across endpoints, network, applications, IT infrastructure and data, AI-led threat intelligence; and to protect critical information and processes through threat intelligence, forensics, identity, encryption, and cloud-based application security. In addition, the company offers business network cloud for digital supply chains and secure e-commerce ecosystems including digitize and automate procure-to-pay and order-to-cash processes; IT operations management cloud for automation and advancement of IT support and asset management; and analytics & AI cloud solutions that offers artificial intelligence with practical usage to provide organizations with actionable insights and better automation, such as visualizations, advanced natural language processing and understanding, and integrated computer vision capabilities. In addition, it provides application automation cloud, developers cloud, and services. Further, it has strategic partnerships with SAP SE, Google Cloud, Amazon AWS, Microsoft Corporation, Oracle Corporation, Salesforce.com Corporation, DXC Technology Company, Accenture plc, Capgemini Technology Services SAS, Deloitte Consulting LLP, Hewlett Packard Enterprises, and Tata Consultancy Services. Open Text Corporation was incorporated in 1991 and is headquartered in Waterloo, Canada.

About Kyndryl

Kyndryl Holdings, Inc. operates as a technology services company and IT infrastructure services provider worldwide. The company offers cloud services; core enterprise and zCloud services; application, data, and artificial intelligence services; digital workplace services; security and resiliency services; and network services and edge services. It serves financial, communications, retail and travel, and automotive industries. The company was incorporated in 2020 and is headquartered in New York, New York.