Oracle (ORCL) AI Stock Analysis

• Market Cap: $388.36B
• Dividend Yield: 1.16%
• Average Volume (3M): 11.28M
• Price to Earnings (P/E): 32.3
• Beta (1Y): 1.43
• Revenue Growth: 6.23%
• EPS Growth: 12.37%
• Country: US
• Employees: 159,000
• Sector: Technology
• Sector Strength: 57
• Industry: Software - Infrastructure
• EPS (TTM): 4.26
• Shares Outstanding: 2,804,234,000
• 10 Day Avg. Volume: 9,692,982
• 30 Day Avg. Volume: 11,281,318
• PEG Ratio: 2.61
• Price to Book (P/B): N/A
• Price to Sales (P/S): 7.77
• Price to Cash Flow (P/CF): 81.80
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $176.78
• Price Target Upside: 27.65% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 29

Oracle's overall score reflects strong financial performance and positive earnings call results. The company's robust profitability and cloud revenue growth are offset by high leverage and technical indicators suggesting potential bearish trends. Valuation remains a concern with a high P/E ratio, but future outlooks and strategic advancements in cloud infrastructure provide confidence in sustained growth.

Positive Factors

Cloud Strategy

Oracle's cloud strategy supports its strong growth as the cloud-based subscription model, giving it the edge to provide more flexible/modular offerings, thereby boosting its customer base.

Competitive Advantage

Oracle has solidified a leading and differentiated position in AI training, with growth rates expected to double over the next year.

Revenue Model

Over 70% of Oracle’s total revenue today is recurring/renewable, adding resiliency to the model.

Negative Factors

Competitive Pressure

Intensified competition could create downward pressure on product pricing and margins.

Cybersecurity Risks

The occurrence of any disruptive cyber incidents could harm Oracle's business or damage its brand and reputation, leading to the loss of existing customers.

Revenue Volatility

While bookings handily outperformed, revenues were weaker, which was opposite of what happened last quarter.

Oracle Business Overview & Revenue Model

Company Description

Oracle Corporation offers products and services that address enterprise information technology environments worldwide. Its Oracle cloud software as a service offering include various cloud software applications, including Oracle Fusion cloud enterprise resource planning (ERP), Oracle Fusion cloud enterprise performance management, Oracle Fusion cloud supply chain and manufacturing management, Oracle Fusion cloud human capital management, Oracle Advertising, and NetSuite applications suite, as well as Oracle Fusion Sales, Service, and Marketing. The company also offers cloud-based industry solutions for various industries; Oracle application licenses; and Oracle license support services. In addition, it provides cloud and license business' infrastructure technologies, such as the Oracle Database, an enterprise database; Java, a software development language; and middleware, including development tools and others. The company's cloud and license business' infrastructure technologies also comprise cloud-based compute, storage, and networking capabilities; and Oracle autonomous database, MySQL HeatWave, Internet-of-Things, digital assistant, and blockchain. Further, it provides hardware products and other hardware-related software offerings, including Oracle engineered systems, enterprise servers, storage solutions, industry-specific hardware, virtualization software, operating systems, management software, and related hardware services; and consulting and customer services. The company markets and sells its cloud, license, hardware, support, and services offerings directly to businesses in various industries, government agencies, and educational institutions, as well as through indirect channels. Oracle Corporation was founded in 1977 and is headquartered in Austin, Texas.

How the Company Makes Money

Oracle makes money primarily through the sale of software licenses, cloud services, and hardware products. Its revenue model is heavily reliant on its cloud and license business, which includes software as a service (SaaS), platform as a service (PaaS), infrastructure as a service (IaaS), and software license updates and product support. A significant portion of Oracle's revenue also comes from its hardware business, which involves the sale of servers, storage, and network products. Additionally, Oracle generates income through consulting services and technical support. The company has established numerous strategic partnerships and alliances to bolster its cloud offerings, thereby enhancing its competitive position in the rapidly evolving technology landscape.

Oracle Financial Statement Overview

Summary

Oracle shows strong profitability with impressive revenue growth and operational efficiency. However, high leverage and a declining free cash flow growth rate present potential risks.

Income Statement

Oracle's income statement is strong, with a robust gross profit margin of 88.5% TTM and a net profit margin of 21.8% TTM, indicating high profitability. The revenue growth rate was impressive at 5.3% annually from 2023 to 2024 and 5.3% from 2024 to TTM, showing consistent growth. EBIT and EBITDA margins were solid at 31.3% and 24.7% TTM, respectively, reflecting efficient operations.

Balance Sheet

Oracle's balance sheet shows a high debt-to-equity ratio of 5.58 TTM, indicating significant leverage, which could pose a risk. However, return on equity (ROE) was strong at 70.5% TTM, suggesting effective use of equity. The equity ratio was relatively low at 10.7% TTM, highlighting a potential risk in financial stability.

Cash Flow

Oracle's cash flow statement demonstrates robust operating cash flow to net income ratio of 1.71 TTM, indicating strong cash generation relative to earnings. The free cash flow margin is stable, but the free cash flow growth rate decreased by 50.8% from 2023 to TTM, suggesting a need for improvement in cash retention.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
55.78B	52.96B	49.95B	42.44B	40.48B	39.07B
	Gross Profit
38.93B	37.82B	36.39B	33.56B	32.62B	31.13B
	EBIT
17.45B	15.35B	13.67B	15.84B	15.65B	14.15B
	EBITDA
23.72B	21.58B	18.90B	18.96B	18.57B	17.12B
	Net Income Common Stockholders
12.16B	10.47B	8.50B	6.72B	13.75B	10.13B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
17.82B	10.66B	10.19B	21.90B	46.55B	43.06B
	Total Assets
161.38B	140.98B	134.38B	109.30B	131.11B	115.44B
	Total Debt
96.28B	94.47B	90.48B	75.86B	84.25B	71.60B
	Net Debt
78.87B	84.02B	80.72B	54.48B	54.15B	34.36B
	Total Liabilities
144.12B	131.74B	132.83B	115.06B	125.16B	102.72B
	Stockholders Equity
16.73B	8.70B	1.56B	-5.77B	5.95B	12.72B
Cash Flow		Free Cash Flow
5.81B	11.81B	8.47B	5.03B	13.75B	11.57B
	Operating Cash Flow
20.75B	18.67B	17.16B	9.54B	15.89B	13.14B
	Investing Cash Flow
-15.29B	-7.36B	-36.48B	11.22B	-13.10B	9.84B
	Financing Cash Flow
2.64B	-10.55B	7.91B	-29.13B	-10.38B	-6.13B

Oracle Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 138.49
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ORCL, the sentiment is Neutral. The current price of 138.49 is above the 20-day moving average (MA) of 133.55, below the 50-day MA of 148.80, and below the 200-day MA of 158.80, indicating a neutral trend. The MACD of -4.34 indicates Negative momentum. The RSI at 50.47 is Neutral, neither overbought nor oversold. The STOCH value of 86.78 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ORCL.

Oracle Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MSFT	83 Outperform	$2.91T	31.19	34.29%	0.81%	15.04%	12.38%
ADBE	76 Outperform	$149.56B	23.11	47.28%	―	10.65%	44.84%
CRWD	76 Outperform	$105.32B	721.64	-0.69%	―	29.39%	-119.62%
ORCL	75 Outperform	$388.36B	32.31	108.79%	1.16%	6.23%	12.37%
PANW	74 Outperform	$118.50B	101.11	23.38%	―	13.86%	-46.44%
SNPS	73 Outperform	$69.06B	33.02	16.27%	―	-1.19%	48.33%
Sector *	59 Neutral	$10.74B	10.21	-6.69%	3.04%	7.44%	-10.92%

Oracle Corporate Events

Oracle’s Edward Screven to Retire After 38 Years

Oracle announced that Edward Screven, Executive Vice President and Chief Corporate Architect, will be retiring after 38 years with the company. He will support the transition of his responsibilities until February 2025 and continue representing Oracle on Ampere Computing Holdings LLC’s Board of Directors, impacting the company’s strategic continuity.