Open Text (NASDAQ:OTEX) versus ACI Worldwide (NASDAQ:ACIW) Head to Head Analysis

Open Text (NASDAQ:OTEX) and ACI Worldwide (NASDAQ:ACIW) are both mid-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitability, dividends, risk and analyst recommendations.

Volatility & Risk

Open Text has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, ACI Worldwide has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Open Text and ACI Worldwide, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Open Text	0	10	4	0	2.29
ACI Worldwide	1	1	3	0	2.40

Open Text presently has a consensus price target of $34.67, indicating a potential upside of 52.85%. ACI Worldwide has a consensus price target of $60.00, indicating a potential upside of 44.02%. Given Open Text’s higher possible upside, analysts clearly believe Open Text is more favorable than ACI Worldwide.

Institutional & Insider Ownership

70.4% of Open Text shares are held by institutional investors. Comparatively, 94.7% of ACI Worldwide shares are held by institutional investors. 10.6% of Open Text shares are held by insiders. Comparatively, 1.1% of ACI Worldwide shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Open Text and ACI Worldwide”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Open Text	$5.17 billion	1.06	$435.87 million	$2.05	11.06
ACI Worldwide	$1.79 billion	2.36	$226.66 million	$1.99	20.93

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Open Text	9.91%	24.77%	7.27%
ACI Worldwide	11.51%	16.76%	7.89%

Summary

Open Text beats ACI Worldwide on 8 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 ACI Worldwide

ACI Worldwide, Inc., a software company, develops, markets, installs, and supports a range of software products and solutions for facilitating digital payments in the United States and internationally. The company operates in three segments: Banks, Merchants, and Billers. The company offers ACI Acquiring, a solution to process credit, debit, and prepaid card transactions, deliver digital innovation, and fraud prevention; ACI Issuing, a digital payment issuing solution for new payment offering; and ACI Enterprise Payments Platform that provides payment processing and orchestration capabilities for digital payments. It also provides ACI Low Value Real-Time Payments, a platform for processing real-time payments; and ACI High Value Real-Time Payments, a payments engine that offers multi-bank, multi-currency, 24×7 payment processing, and SWIFT messaging. In addition, the company offers ACI Payments Orchestration Platform for optimizing payments; omni-channel payment platform; ACI Fraud Management, a real-time approach to fraud management; and ACI Speedpay, an integrated suite of digital billing, payment, disbursement, and communication services. The company offers electronic bill presentment and payment services to consumer finance, insurance, healthcare, higher education, utility, government, telecommunications, and mortgage sectors; implementation services, include product installations and configurations, and custom software modifications; and business and technical consultancy, on-site support, product education, and testing services, as well as distributes or acts as a sales agent for software developed by third parties. It markets its products under the ACI Worldwide brand. The company was formerly known as Transaction Systems Architects, Inc. and changed its name to ACI Worldwide, Inc. in July 2007. The company was founded in 1975 and is based in Elkhorn, Nebraska.