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The Open Text building in Waterloo, Ont. (Kevin Van Paassen/Kevin Van Paassen/The Globe and Mail)
The Open Text building in Waterloo, Ont. (Kevin Van Paassen/Kevin Van Paassen/The Globe and Mail)

Open Text shares surge after profit jump Add to ...

Shares of Open Text Corp. surged 14 per cent on Thursday morning after the business software company posted a sharp jump in profit and several analysts upgraded their view.

The company’s licensing revenue in the quarter - an indicator of future demand - came in higher than expected, while a feared disruption from weak European demand was muted.

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“We expect this quarter’s results to mark a change in sentiment toward the company,” Stifel Nicolaus analyst Blair Abernethy wrote in a note upgrading the company to a “buy”.

But Susquehanna Financial analyst J. Derrick Wood was more circumspect, raising his price target to $45 from $40 but retaining a negative rating. He warned that a focus on organic growth after a string of acquisitions risks either stagnation or declining margins.

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