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Oracle (ORCL)
NYSE:ORCL

Oracle (ORCL) AI Stock Analysis

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Oracle

(NYSE:ORCL)

75Outperform
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
AI Infrastructure
Oracle's deployment of NVIDIA GPUs is expected to improve investor confidence by addressing previous capacity issues, showing that Oracle is effectively growing its infrastructure.
Cloud Strategy
Oracle’s cloud service (SaaS and IaaS) revenue growth rate maintains a rapid growth of c.27% in FY24, despite the economic downturn.
Competitive Edge
Oracle is one of the first providers to offer NVIDIA GB200 systems with advanced networking and software integrations, which enhances its competitive edge in the cloud services market.
Negative Factors
Competition
Intensified competition could create downward pressure on product pricing and margins.
Cybersecurity Risk
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.

Oracle (ORCL) vs. S&P 500 (SPY)

Oracle Business Overview & Revenue Model

Company DescriptionOracle Corporation, headquartered in Austin, Texas, is a global leader in enterprise software and information technology solutions. The company specializes in developing and marketing database software and technology, cloud-engineered systems, and enterprise software products—particularly its own brands of database management systems. Oracle’s offerings span a comprehensive range of sectors including cloud computing, database management, application development, and business analytics, serving a vast array of industries worldwide.
How the Company Makes MoneyOracle 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 Key Performance Indicators (KPIs)

Any
Any
Revenue by Segment
Revenue by Segment
Reveals how much each business unit contributes to Oracle's overall sales, indicating areas of strength and potential growth opportunities.
Chart InsightsOracle's Cloud Services and License Support segment continues its robust growth trajectory, reflecting a strategic focus on cloud infrastructure and applications. The recent earnings call highlights a 12% increase in this segment, driven by Oracle Cloud Infrastructure and strategic cloud applications. Despite exiting the advertising business, which slightly dampened cloud revenue growth, Oracle's aggressive expansion of cloud regions and multi-cloud partnerships with major tech firms underscore its commitment to capturing market share. The company's confidence is further bolstered by a record backlog and ambitious revenue growth targets for the coming years.
Data provided by:Main Street Data

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
85
Very Positive
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
75
Positive
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
80
Positive
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
Jun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income StatementTotal Revenue
52.96B49.95B42.44B40.48B39.07B
Gross Profit
37.82B36.39B33.56B32.62B31.13B
EBIT
15.35B13.67B15.84B15.65B14.15B
EBITDA
21.58B18.90B18.96B18.57B17.12B
Net Income Common Stockholders
10.47B8.50B6.72B13.75B10.13B
Balance SheetCash, Cash Equivalents and Short-Term Investments
10.66B10.19B21.90B46.55B43.06B
Total Assets
140.98B134.38B109.30B131.11B115.44B
Total Debt
94.47B90.48B75.86B84.25B71.60B
Net Debt
84.02B80.72B54.48B54.15B34.36B
Total Liabilities
131.74B132.83B115.06B125.16B102.72B
Stockholders Equity
8.70B1.56B-5.77B5.95B12.72B
Cash FlowFree Cash Flow
11.81B8.47B5.03B13.75B11.57B
Operating Cash Flow
18.67B17.16B9.54B15.89B13.14B
Investing Cash Flow
-7.36B-36.48B11.22B-13.10B9.84B
Financing Cash Flow
-10.55B7.91B-29.13B-10.38B-6.13B

Oracle Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price145.49
Price Trends
50DMA
146.01
Negative
100DMA
158.04
Negative
200DMA
158.80
Negative
Market Momentum
MACD
-1.18
Negative
RSI
57.30
Neutral
STOCH
94.59
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 145.49 is above the 20-day moving average (MA) of 133.59, below the 50-day MA of 146.01, and below the 200-day MA of 158.80, indicating a neutral trend. The MACD of -1.18 indicates Negative momentum. The RSI at 57.30 is Neutral, neither overbought nor oversold. The STOCH value of 94.59 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ORCL.

Oracle Risk Analysis

Oracle disclosed 30 risk factors in its most recent earnings report. Oracle reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Oracle Peers Comparison

Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
84
Outperform
$3.16T34.2634.29%0.80%15.04%12.38%
76
Outperform
$149.56B23.1147.28%10.65%44.84%
76
Outperform
$107.05B721.64-0.69%29.39%-119.62%
75
Outperform
$407.99B34.18108.79%1.14%6.23%12.37%
74
Outperform
$123.33B105.2323.38%13.86%-46.44%
73
Outperform
$70.97B33.9416.27%-1.19%48.33%
59
Neutral
$10.75B10.37-6.64%3.00%7.30%-12.02%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ORCL
Oracle
145.49
30.97
27.04%
ADBE
Adobe
374.63
-111.55
-22.94%
MSFT
Microsoft
425.40
21.82
5.41%
PANW
Palo Alto Networks
186.27
38.17
25.77%
SNPS
Synopsys
459.36
-77.58
-14.45%
CRWD
CrowdStrike Holdings
431.88
121.67
39.22%

Oracle Earnings Call Summary

Earnings Call Date:Mar 10, 2025
(Q3-2025)
|
% Change Since: -1.87%|
Next Earnings Date:Jun 17, 2025
Earnings Call Sentiment Positive
The earnings call reflected Oracle's strong performance with record-breaking bookings, robust cloud revenue growth, and significant advancements in AI and cloud infrastructure. However, the exit from the advertising business, component delays, and currency impacts posed challenges. Overall, the highlights significantly outweigh the lowlights.
Q3-2025 Updates
Positive Updates
Record-Breaking Bookings and RPO Growth
Oracle's backlog increased by $48 billion, and their RPO balance reached $130 billion, up 63% year-over-year. This excludes contracts with project Stargate.
Expansion of Cloud Services
Oracle's 101st cloud region came online, marking a milestone. The company aims to have more cloud regions than competitors combined, leveraging their Gen 2 architecture.
Strong Cloud Revenue Growth
Total cloud revenue was up 25% at $6.2 billion, with SaaS revenue of $3.6 billion (up 10%) and IaaS revenue of $2.7 billion (up 51%).
AI Demand and Infrastructure Growth
Record level AI demand drove OCI revenue up 51%. GPU consumption revenue is nearly 3.5 times the size of last year's.
Dividend Increase
Oracle's Board of Directors increased the quarterly dividend by 25%, from $0.40 to $0.50 per share.
Multi-Cloud Partnerships
Oracle's multi-cloud business with Amazon, Google, and Microsoft grew 200% in the last three months alone, with plans for 40 more regions.
Negative Updates
Exit from Advertising Business
The exit from the advertising business last year lowered total cloud revenue growth by 2% this quarter.
Component Delays Impact Capacity Expansion
Oracle experienced delays in cloud capacity expansion due to component shortages, expected to ease in Q1 FY '26.
Higher Non-GAAP Tax Rate
The non-GAAP tax rate for the quarter was 19.9%, higher than the 19% guidance, affecting EPS by $0.02.
Currency Headwind
Currency fluctuations resulted in a $0.04 negative impact on EPS, more than initially expected.
Company Guidance
During the Oracle Corporation Third Quarter Fiscal Year 2025 Earnings Conference Call, the company provided detailed guidance and metrics reflecting their strong performance and future outlook. Oracle reported a record $48 billion addition to their backlog, with a Remaining Performance Obligation (RPO) balance now at $130 billion, up 63% year-over-year. Oracle's cloud revenue, comprising SaaS and IaaS, was up 25% to $6.2 billion, with SaaS revenue increasing by 10% and IaaS revenue surging by 51%. The total cloud services and license support revenue reached $11 billion, up 12%, driven by Oracle Cloud Infrastructure (OCI) and strategic cloud applications. Oracle's infrastructure subscription revenues were $6.2 billion, up 18%, with OCI consumption revenue up 57%, and GPU consumption revenue nearly 3.5 times the size of last year’s. They forecast a fiscal year 2025 CapEx of approximately $16 billion and projected total cloud revenue to grow by 24% to 28% in constant currency for Q4. Additionally, Oracle expects a 15% revenue growth rate for FY '26 and a 20% growth rate for FY '27, highlighting confidence in their $66 billion revenue target for FY '26.

Oracle Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Oracle’s Edward Screven to Retire After 38 Years
Neutral
Jan 13, 2025

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.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.