abrooklyn
5 months ago
Oracle Announces Fiscal 2024 Fourth Quarter and Fiscal Full Year Financial Results
Source: PR Newswire (US)
Q4 Total Remaining Performance Obligations up 44% to $98 billion
Q4 GAAP Earnings per Share $1.11, Non-GAAP Earnings per Share $1.63
Q4 Total Revenue $14.3 billion, up 3% in USD, up 4% in constant currency
Q4 Cloud Revenue (IaaS plus SaaS) $5.3 billion, up 20% in USD and constant currency
Q4 Cloud Infrastructure (IaaS) Revenue $2.0 billion, up 42% in USD and constant currency
Q4 Cloud Application (SaaS) Revenue $3.3 billion, up 10% in USD and constant currency
Q4 Fusion Cloud ERP (SaaS) Revenue $0.8 billion, up 14% in USD and constant currency
Q4 NetSuite Cloud ERP (SaaS) Revenue $0.8 billion, up 19% in USD and constant currency
FY 2024 Total Revenue $53.0 billion, up 6% in USD and constant currency
AUSTIN, Texas, June 11, 2024 /PRNewswire/ -- Oracle Corporation (NYSE: ORCL) today announced fiscal 2024 Q4 and full-year 2024 results. Total quarterly revenues were up 3% year-over-year in USD and up 4% in constant currency to $14.3 billion. Cloud services and license support revenues were up 9% in USD and up 10% in constant currency to $10.2 billion. Cloud license and on-premise license revenues were down 15% in USD and down 14% in constant currency to $1.8 billion.
Q4 GAAP operating income was $4.7 billion. Non-GAAP operating income was $6.7 billion, up 8% in USD and up 9% in constant currency. GAAP operating margin was 33%, and non-GAAP operating margin was 47%. GAAP net income was $3.1 billion, and non-GAAP net income was $4.6 billion. Q4 GAAP earnings per share was $1.11 while non-GAAP earnings per share was $1.63.
Short-term deferred revenues were $9.3 billion. Operating cash flow was $18.7 billion during fiscal year 2024, up 9% in USD.
Fiscal year 2024 total revenues were up 6% in USD and constant currency to $53.0 billion. Cloud services and license support revenues were up 12% in USD and up 11% in constant currency to $39.4 billion. Cloud license and on-premise license revenues were down 12% in USD and constant currency to $5.1 billion.
Fiscal year 2024 GAAP operating income was $15.4 billion, and GAAP operating margin was 29%. Non-GAAP operating income was $23.1 billion, and non-GAAP operating margin was 44%. GAAP net income was $10.5 billion, while non-GAAP net income was $15.7 billion. GAAP earnings per share was $3.71, while non-GAAP earnings per share was $5.56.
"In Q3 and Q4, Oracle signed the largest sales contracts in our history—driven by enormous demand for training AI large language models in the Oracle Cloud," said Oracle CEO, Safra Catz. "These record level sales drove RPO up 44% to $98 billion. Throughout fiscal year 2025, I expect continued strong AI demand to push Oracle sales and RPO even higher—and result in double-digit revenue growth this fiscal year. I also expect that each successive quarter should grow faster than the previous quarter—as OCI capacity begins to catch up with demand. In Q4 alone, Oracle signed over 30 AI sales contracts totaling more than $12.5 billion—including one with Open AI to train ChatGPT in the Oracle Cloud."
"Our multicloud cooperation with Microsoft expanded significantly in Q4, as we agreed to work together to support Open AI and ChatGPT—and 11 of the 23 OCI datacenters we are building inside Azure went live," said Oracle Chairman and CTO, Larry Ellison. "As this Azure/OCI cloud capacity becomes available to the large installed base of Microsoft and Oracle customers, it will turbocharge our cloud database growth. Now customers can run any and every version of the Oracle database—Autonomous, 23ai Vector DB, etc.— in both the Azure and the Oracle Clouds. As customers continue to choose and use multiple clouds, Hyperscalers like Microsoft and Google are responding by interconnecting their clouds. Oracle recently signed an agreement with Google to interconnect our clouds—and initially build 12 OCI datacenters inside the Google Cloud. We expect the Oracle database to be available within the Google Cloud in September this year."
The board of directors declared a quarterly cash dividend of $0.40 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on July 11, 2024, with a payment date of July 25, 2024.
A sample list of customers which purchased Oracle Cloud services during the quarter will be available at www.oracle.com/customers/earnings/.
A list of recent technical innovations and announcements is available at www.oracle.com/news/.
To learn what industry analysts have been saying about Oracle's products and services see www.oracle.com/corporate/analyst-reports/.
Earnings Conference Call and Webcast
Oracle will hold a conference call and webcast today to discuss these results at 4:00 p.m. Central. A live and replay webcast will be available on the Oracle Investor Relations website at www.oracle.com/investor/.
About Oracle
Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit us at www.oracle.com.
Trademarks
Oracle, Java, MySQL, and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company—ushering in the new era of cloud computing.
"Safe Harbor" Statement: Statements in this press release relating to future plans, expectations, beliefs, intentions and prospects, including expectations for AI demand driving revenue growth and the timing of such growth, the effects of our multicloud strategy on cloud database growth, and our plans for datacenters and Oracle database availability inside the Google Cloud, are "forward-looking statements" and are subject to material risks and uncertainties. Risks and uncertainties that could affect our current expectations and our actual results, include, among others: our ability to develop new products and services, integrate acquired products and services and enhance our existing products and services; our management of complex cloud and hardware offerings, including the sourcing of technologies and technology components; significant coding, manufacturing or configuration errors in our offerings; risks associated with acquisitions; economic, political and market conditions; information technology system failures, privacy and data security concerns; cybersecurity breaches; unfavorable legal proceedings, government investigations, and complex and changing laws and regulations. A detailed discussion of these factors and other risks that affect our business is contained in our SEC filings, including our most recent reports on Form 10-K and Form 10-Q, particularly under the heading "Risk Factors." Copies of these filings are available online from the SEC or by contacting Oracle's Investor Relations Department at (650) 506-4073 or by clicking on SEC Filings on the Oracle Investor Relations website at www.oracle.com/investor/. All information set forth in this press release is current as of June 11, 2024. Oracle undertakes no duty to update any statement in light of new information or future events.
Oleblue
7 months ago
Is the Deal Between Palantir Technologies and Oracle a Game Changer?
Danny Vena, The Motley Fool
Mon, Apr 8, 2024, 2:00 PM EDT
One of the most high-profile trends over the past year or so has been the growing adoption of artificial intelligence (AI). The latest advances in this quickly evolving field have created something of an AI gold rush as businesses scramble to determine how best to leverage this nascent technology.
There are a vast and growing number of applications for generative AI, which can create original content, including text, images, and video. It can also summarize data, produce presentations, and streamline time-consuming and mundane tasks, thereby increasing worker productivity. Time is money, so companies are eager to claim their share of the expected windfall.
Now, AI software and data analytics pioneer Palantir Technologies (NYSE: PLTR) and database and cloud computing specialist Oracle (NYSE: ORCL) are joining forces to help bring AI to the masses.
The letters AI emblazoned on a cloud symbol positioned above a circuit board.
Image source: Getty Images.
A pairing of titans
In a press release on Thursday, Palantir and Oracle announced a far-reaching collaboration to combine their AI and cloud expertise to further accelerate the adoption of AI. The duo will "provide secure cloud and AI solutions aiming to power businesses and governments around the world."
The goal of the partnership is to help organizations get the most value out of their data, thanks to the combination of Palantir's "leading AI and decision acceleration platforms," which will leverage Oracle's "distributed cloud and AI infrastructure."
Palantir offers three broad-based data analytics software services. Gotham is the company's original government-centric and defense-oriented data analytics platform. Foundry offers similar services for corporate and enterprise clients, and Metropolis handles banks, hedge funds, and other financial services firms.
As part of the agreement, Palantir will move Foundry workloads to Oracle Cloud. Furthermore, Palantir will make Gotham and Artificial Intelligence Platform (AIP) -- its generative AI offering -- deployable across Oracle's distributed cloud for the first time.
One of the obvious target markets is government customers and enterprise users seeking greater control over their data. The release highlighted Oracle's "air-gapped regions for defense and intelligence customers," and Palantir's work with law enforcement and government intelligence agencies is well documented. Combining Palantir's AI-powered data analytics with Oracle's secure cloud seems like a no-brainer.
A win-win situation.
Both Palantir and Oracle have been attracting attention for their AI efforts in recent months.
Palantir's expansion beyond its original government mandate has served the company well. In the fourth quarter, revenue of $608 million grew 20% year over year, and Palantir generated its fifth consecutive quarterly profit, but that tells just part of the story. While government revenue -- which tends to be lumpy -- grew 11% year over year, commercial revenue increased 32%. This was led by its U.S. commercial segment -- its fastest-growing business -- as revenue soared 70% year over year and is expected to jump at least 40% in 2024.
The catalyst for that growth was AIP. Palantir began offering boot camps to kick-start customer adoption of AI and demand has been off the charts. By working side-by-side with Palantir's engineers, companies can solve real-world and business-specific problems with the help of its generative AI-powered application.
In October, management announced Palantir's intention to complete 500 such boot camps over the coming year. The company has since "blown that goal out of the water," hosting more than 560 boot camps across 465 organizations in just four months.
Oracle has also been attracting attention for its recent successes. In its fiscal 2024 third quarter (ended Feb. 29), revenue of $13.3 billion grew 7% year over year, generating adjusted earnings per share (EPS) of $1.41, up 16%.
It was Oracle's backlog, however, that raised eyebrows. The company's remaining performance obligation (RPO) -- or contractually obligated sales that haven't yet been booked as revenue -- jumped to $80 billion, up 29% year over year to an all-time record.
Furthermore, Oracle's cloud infrastructure revenue increased 52% year over year. This far outpaced the performances of Amazon Web Services, Alphabet's Google Cloud, and Microsoft Azure, which generated growth of 13%, 26%, and 30%, respectively. This suggests Oracle was stealing market share at the expense of the competition. CEO Safra Catz said demand for its AI cloud capabilities "substantially exceeds supply," and expects Oracle's cloud infrastructure operation to remain in a "hypergrowth phase ... for the foreseeable future."
Is the deal a game changer?
One of the biggest benefits of this deal is that Palantir and Oracle will -- jointly and individually -- offer a wide range of complementary cloud and AI services. Oracle Cloud provides "performance, scalability, and flexibility." When combined with Palantir's "leading data and AI platforms," it offers users the best of both worlds and could attract potential customers who might otherwise pass.
Given their growth prospects and the tantalizing AI wild card, both stocks offer compelling opportunities. Oracle is currently selling for 22 times forward earnings, making it a steal. At 70 times forward earnings and 16 times forward sales, Palantir might seem prohibitively expensive, but those metrics fail to factor in its accelerating growth. However, the forward price/earnings-to-growth (PEG) ratio -- which takes that growth into account -- results in a multiple of less than 1, the standard for an undervalued stock.
While the deal might not rise to the level of being a game changer, it does enhance the prospects of two of AI's fastest-rising stars. It will also likely help both companies continue to expand their market share in the fast-growing AI space.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Danny Vena has positions in Alphabet, Amazon, Microsoft, and Palantir Technologies. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, Oracle, and Palantir Technologies. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Is the Deal Between Palantir Technologies and Oracle a Game Changer? was originally published by The Motley Fool
https://finance.yahoo.com/news/deal-between-palantir-technologies-oracle-180000463.html
DiscoverGold
8 months ago
Oracle (ORCL) Beats on Profit, Teases Nvidia Announcement
By: Schaeffer's Investment Research | March 12, 2024
• Oracle's earnings beat has the stock trading at record high levels
• Options traders and analysts are chiming in after the tech company's report
Oracle Corp (NYSE:ORCL) stock was last seen up 10.1% to trade at $125.70, after the tech company beat fiscal third-quarter earnings thanks in part to artificial intelligence (AI) demand. The company also teased a joint announcement with chip giant Nvidia (NVDA) ahead of a global AI conference for developers on Monday, March 18.
ORCL drew no fewer than 16 price-target hikes in response, the highest coming from Mizuho to $160 from $140. Analysts remain split on ORCL, however, with half the brokerage firms in coverage calling it a "hold," so a round of upgrades could push ORCL higher.
Shares today finally cleared $129 -- where rallies ran out of steam in June and September -- to notch an all-time high of $129.37. The 80-day moving average, which coincides with a short-term floor at $111, served as a springboard for today's rally, which could also mark ORCL' best day since June 2022. In the last 12 months, Oracle stock added 49%.
Options traders aren't missing a beat. So far today, 116,000 calls and 63,000 puts have crossed the tape, volume that's 20 times the intraday average amount. Most active is the March 130 call, followed by the April 130 call, with positions being opened at the former.
That call bias is nothing new. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ORCL's 50-day call/put volume ratio of 2.48 ranks higher than 89% of annual readings.
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abrooklyn
8 months ago
Oracle Announces Fiscal 2024 Third Quarter Financial Results
Source: PR Newswire (US)
Q3 GAAP Earnings per Share $0.85, Non-GAAP Earnings per Share up 16% to $1.41
Q3 Total Revenue $13.3 billion, up 7% in both USD and constant currency
Q3 Total Remaining Performance Obligations up 29% to $80 billion
Q3 Cloud Revenue (IaaS plus SaaS) $5.1 billion, up 25% in USD, up 24% in constant currency
Q3 Cloud Infrastructure (IaaS) Revenue $1.8 billion, up 49% in both USD and constant currency
Q3 Cloud Application (SaaS) Revenue $3.3 billion, up 14% in both USD and constant currency
Q3 Fusion Cloud ERP (SaaS) Revenue $0.8 billion, up 18% in both USD and constant currency
Q3 NetSuite Cloud ERP (SaaS) Revenue $0.8 billion, up 21% in USD, up 20% in constant currency
AUSTIN, Texas, March 11, 2024 /PRNewswire/ -- Oracle Corporation (NYSE: ORCL) today announced fiscal 2024 Q3 results. Total quarterly revenues were up 7% year-over-year in both USD and constant currency to $13.3 billion. Cloud services and license support revenues were up 12% in USD and up 11% in constant currency to $10.0 billion. Cloud license and on-premise license revenues were down 3% in both USD and constant currency to $1.3 billion.
Q3 GAAP operating income was $3.8 billion. Non-GAAP operating income was $5.8 billion, up 12% in both USD and constant currency. GAAP operating margin was 28%, and non-GAAP operating margin was 44%. GAAP net income was $2.4 billion. Non-GAAP net income was $4.0 billion, up 18% in both USD and constant currency. Q3 GAAP earnings per share was $0.85 while non-GAAP earnings per share was $1.41, up 16% in both USD and constant currency.
Short-term deferred revenues were $8.9 billion. Over the last twelve months, operating cash flow was $18.2 billion and free cash flow was $12.3 billion.
"Large new cloud infrastructure contracts signed in Q3 drove Oracle's total Remaining Performance Obligations up 29% to over $80 billion—an all-time record," said Oracle CEO, Safra Catz. "We expect to continue receiving large contracts reserving cloud infrastructure capacity because the demand for our Gen2 AI infrastructure substantially exceeds supply—despite the fact we are opening new and expanding existing cloud datacenters very, very rapidly. We expect that 43% of our current $80 billion of Remaining Performance Obligations will be recognized as revenue over the next four quarters, and that our Gen2 Cloud Infrastructure business will remain in a hypergrowth phase—up 53% in Q3—for the foreseeable future."
"In Q3, Oracle finished moving the majority of Cerner customers to Oracle's Gen2 Cloud Infrastructure," said Oracle Chairman and CTO, Larry Ellison. "In Q4, Oracle will start delivering its completely new Ambulatory Clinic Cloud Application Suite to these same customers. This new AI-driven system features an integrated voice interface called the Clinical Digital Assistant that automatically generates doctors' notes and updates Electronic Health Records—saving precious time and improving health data accuracy. The delivery of this revolutionary new healthcare technology will enable the rapid modernization of our customers' health systems over the coming year, and transform Cerner and Oracle Health into a high-growth business for years to come."
The board of directors declared a quarterly cash dividend of $0.40 per share of outstanding common stock. This dividend will be paid to stockholders of record as of the close of business on April 10, 2024, with a payment date of April 24, 2024.
A sample list of customers which purchased Oracle Cloud services during the quarter will be available at www.oracle.com/customers/earnings/.
A list of recent technical innovations and announcements is available at www.oracle.com/news/.
To learn what industry analysts have been saying about Oracle's products and services see www.oracle.com/corporate/analyst-reports/.
Earnings Conference Call and Webcast
Oracle will hold a conference call and webcast today to discuss these results at 4:00 p.m. Central. A live and replay webcast will be available on the Oracle Investor Relations website at www.oracle.com/investor/.
About Oracle
Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit us at www.oracle.com.
Trademarks
Oracle, Java, MySQL, and NetSuite are registered trademarks of Oracle Corporation. NetSuite was the first cloud company—ushering in the new era of cloud computing.
"Safe Harbor" Statement: Statements in this press release relating to future plans, expectations, beliefs, intentions and prospects, including demand for Oracle Cloud Infrastructure capacity, expectations for growth in our Cerner, Oracle Health and Gen2 Cloud Infrastructure businesses, the rate and timing of conversion of the Remaining Performance Obligations to revenue and beliefs regarding modernizing digital healthcare systems, are "forward-looking statements" and are subject to material risks and uncertainties. Risks and uncertainties that could affect our current expectations and our actual results, include, among others: our ability to develop new products and services, integrate acquired products and services and enhance our existing products and services; our management of complex cloud and hardware offerings, including the sourcing of technologies and technology components; significant coding, manufacturing or configuration errors in our offerings; risks associated with acquisitions; economic, political and market conditions; information technology system failures, privacy and data security concerns; cybersecurity breaches; unfavorable legal proceedings, government investigations, and complex and changing laws and regulations. A detailed discussion of these factors and other risks that affect our business is contained in our SEC filings, including our most recent reports on Form 10-K and Form 10-Q, particularly under the heading "Risk Factors." Copies of these filings are available online from the SEC or by contacting Oracle's Investor Relations Department at (650) 506-4073 or by clicking on SEC Filings on the Oracle Investor Relations website at www.oracle.com/investor/. All information set forth in this press release is current as of March 11, 2024. Oracle undertakes no duty to update any statement in light of new information or future events.
DiscoverGold
11 months ago
Oracle (ORCL) Bears Could Be Tempting a Gamma Squeeze
By: Barchart | December 18, 2023
One of the beautiful aspects of options trading is that if you know what to look for, you don’t necessarily need to participate in its often-complex tactics and strategies. Instead, you can simply buy the underlying security in the open market and ride out the implications of derivative market dynamics.
Case in point is cloud software giant Oracle (ORCL). After posting a strong performance so far this year, some market experts have argued that a downturn was simply inevitable. So far, that’s exactly what has happened. Recently, the company disclosed results for its fiscal second quarter, disappointing onlookers.
Despite a modest lift in revenue on a year-over-year basis, Oracle failed to meet Wall Street’s consensus estimate. Conspicuously, the company suffered a 17.9% YOY decline in sales from its cloud and on-premise licenses. In fairness, that red ink was counteracted by a 12% YOY lift in the cloud services and license support units.
Still, ORCL stock absorbed an approximate 10% loss in the trailing month, confirming that investors were looking for a bit extra, something that the enterprise simply could not deliver. Along with the mixed earnings disclosure, the Barchart Technical Opinion indicator rates ORCL stock a 24% sell with a weak short-term outlook.
Adding to the pensive nature of ORCL stock, analysts are perfectly split on the software stalwart. Among 24 experts, 12 rate ORCL a strong buy and the other half view it as a hold. Interestingly, the overall assessment is a slight improvement from the 10 strong buys and 14 holds from three months ago. However, analysts aren’t exactly clamoring for Oracle stock.
On the surface, the framework seems stuck at a stalemate at best and unpleasant at worst. Nevertheless, the technical indicator also warns that ORCL stock is approaching oversold territory and that investors should be watchful of a trend reversal.
That’s a non-zero probability. Here’s why.
ORCL Stock is Begging for a Reversal
Following the close of the Dec. 15 session, ORCL stock represented one of the highlights in Barchart’s screener for unusual stock options volume. Now, let me be blunt. This inclusion doesn’t really mean a whole lot. Otherwise, we’d all be rich just buying securities that show up on this or that radar.
But ORCL stock making it on the list on Friday does point to a possible bullish framework. First, total volume reached 278,777 contracts, representing a 189.73% increase in activity relative to its trailing one-month average volume metric. Within this tally, 221,010 contracts were call options, yielding a face-value bullish put/call volume ratio of 0.26.
To be sure, this figure doesn’t mean a whole lot by itself. However, in recent sessions, the options flow screener – which exclusively filters for big block transactions – shows heavy demand for sold calls. That’s not particularly surprising given the disappointing fiscal Q2 earnings report.
In a technical sense, then, market makers or institutional traders have become short gamma through their sold (written) calls. Essentially, gamma is the rate of change in an option’s delta and the underlying asset’s price. Regarding ORCL stock, if it declines, the gamma of the short call options becomes more negative. For the bears, that’s exactly the outcome they’re hoping for.
However, on Friday, ORCL stock decided to pop up 3%. Now, the gamma is suddenly becoming more positive, an unexpected outcome. And with many of the sold calls featuring a strike price of $104, the delta is becoming more sensitive to the volatility of ORCL in the open market.
Depending on the exposure and the overall liquidity situation, a gamma squeeze may soon materialize because the big players – who effectively are short ORCL stock – must now cover their bearish wagers. Should Oracle shares continue to rise higher, the pessimists may find themselves under greater pressure to cut their losses by buying the underlying security.
Of course, buying activity would likely lead to a feedback loop as other bearish positions get blown up, leading to a potentially significant spike in ORCL stock.
Why the Trade Might Work
One of the reasons why gamma squeezes fueled by heavy sold calls may be the most impactful centers on the risk of unlimited losses. When traders buy an option, they have the right but not the obligation to exercise the contract. On the flipside, traders selling an option have the obligation but not the right to fulfill the terms of the contract.
When it comes to sold calls, call writers (sellers) agree to see the underlying stock at the listed strike price. However, if the writer doesn’t own the security – meaning the sold calls are naked – the trader must buy the stock in the open market. If shares rise higher, the call writer must buy the security at the elevated price, only to sell it at the lower strike price.
Since a stock can theoretically rise indefinitely, the losses are undefined. Needless to say, it’s a harrowing situation.
Obviously, the potential for a gamma squeeze – even in cases involving heavy volume of sold calls – offers zero guarantees. Further, when the biggest and smartest institutions do anything, it’s usually for a well-thought-out reason. Still, stuff happens, which could work in your favor if you want to speculate on ORCL stock.
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DiscoverGold
11 months ago
Oracle tumbles as tepid forecast fans cloud growth concerns
By: Investing | December 12, 2023
(Reuters) - Oracle (NYSE:ORCL) shares fell 9% in premarket trading on Tuesday as another quarter of below-expectations cloud sales and a bleak forecast amplified concerns over the pace of growth at the business expected to benefit from a boom in generative AI.
Revenue growth at the firm's cloud infrastructure unit, which competes with industry heavyweights Amazon (NASDAQ:AMZN) Web Services and Microsoft (NASDAQ:MSFT) Azure, has slowed over the last three quarters.
"The lower OCI (Oracle Cloud Infrastructure) growth will worry investors as this is the main investment story," analysts at Barclays wrote in a note.
Oracle's shares have climbed 40% this year as investors bet that the rising adoption of generative AI, the technology behind popular chatbot ChatGPT, will drive growth for companies providing data center services.
The company, co-founded by billionaire Larry Ellison, has been investing heavily to build data centers as part of its strategy to become a cloud-based company.
Oracle on Monday blamed supply constraints for the weak results, with CEO Safra Catz saying that demand for the company's generative AI and cloud infrastructure services was increasing at "an astronomical rate."
Still, analysts raised concerns about the company's prospects. At least four brokerages cut their price targets on the stock following the results.
"Two consecutive quarters of cloud revenue shortfalls partially erode our confidence that a cloud transition can drive a sustainable top-line growth recovery," brokerage Piper Sandler said.
Total cloud revenue, which includes software, rose 25% in the second quarter ended Nov. 30, missing the company's expectations for a 29%-31% increase.
Weaker enterprise spending and intense competition from larger players were also a drag on overall results.
Oracle forecast third-quarter revenue growth, including health data software platform Cerner (NASDAQ:CERN), to be in the range of 6%-8%. The mid-point of the forecast is below analysts' average estimate for growth of about 7.6%, according to LSEG data.
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DiscoverGold
DiscoverGold
11 months ago
Oracle forecasts Q3 revenue below estimates on weak cloud spending, shares fall
By: Investing | December 11, 2023
(Reuters) -Oracle forecast quarterly revenue below estimates on Monday, as an uncertain economy and competition in the cloud computing market weighed on demand for its cloud offerings, sending its shares down more than 7% in extended trading.
Sticky inflation and high borrowing costs have forced firms to cut back on expenditure, hurting companies like Oracle (NYSE:ORCL) that depend on enterprise spending.
In October, Google-parent Alphabet (NASDAQ:GOOGL) also reported the slowest growth in its cloud division in at least 11 quarters, raising concerns over demand.
A big drag on results might have been from the Cerner (NASDAQ:CERN) business Oracle acquired last year as well as continued sluggish enterprise spending, according to Gil Luria, a research analyst at D.A. Davidson.
For the current quarter, Oracle forecast revenue growth, including Cerner, to be in the range of 6%-8%, the mid point of which is below analysts' average estimate for growth of about 7.6%, according to LSEG data.
Total revenue for the second quarter was up 4%, including Cerner, and up 6% excluding Cerner, CEO Safra Catz said on an earnings call.
Oracle has been working to bolster its AI infrastructure as firms look to adopt generative AI. However, frontrunners Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) continue to dominate the market.
Larger players have already made deep inroads in the AI ecosystem, limiting opportunities for Oracle to gain a sizeable market share.
In October, Microsoft beat Wall Street estimates for first-quarter results across all segments, with its AI offerings propelling growth in the cloud computing segment.
Oracle reported second-quarter revenue of $12.94 billion, below analysts' average estimate of $13.05 billion, according to LSEG data.
Its adjusted earnings of $1.34 per share for the quarter ended Nov. 30 narrowly beat estimates.
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DiscoverGold
DiscoverGold
1 year ago
Oracle director sells shares amid insider selling trend
By: Investing | November 14, 2023
NEW YORK - Oracle Corporation (NYSE: NYSE:ORCL) director George N. Conrades executed a significant sale of company shares, according to a Form 4 filing with the Securities and Exchange Commission. Conrades sold 4,650 shares for a total of $524,828, with Oracle's stock trading up by 0.65% at $114.89 at the time of the transaction.
The sale took place as part of a broader pattern at Oracle, with the past year showing a trend of insider selling—13 insider sales and no reported buys. This trend is noteworthy as insider transactions can be a valuable indicator for investors. Insiders are defined by Section 12 of the Securities Exchange Act of 1934 as officers or directors who own more than ten percent of a company's equity securities, and they are required to report their transactions within two business days via a Form 4 filing.
While insider buys can suggest confidence in a company's future growth, sales do not necessarily predict an impending drop in stock price. Each transaction is detailed in Table I of the Form 4 filing, which includes specific codes that denote the nature of the trade.
Oracle is well-known for its comprehensive cloud applications, platform services, engineered systems, and database management solutions, playing a crucial role in digital transformation initiatives across businesses. At the time of Conrades' sale, Oracle shares were trading at $112.87 with a price-to-earnings (P/E) ratio that exceeded both the industry average and Oracle's own historical median. According to GuruFocus Value, this could indicate a potential slight overvaluation of Oracle stock.
Investors have access to commission-free online stock trading through platforms such as Charles Schwab (NYSE:SCHW), which allows for easier participation in the market without additional transaction costs.
This recent insider activity at Oracle has been captured by Benzinga's automated content engine and verified by an editor, ensuring that stakeholders have access to timely and relevant information about significant insider trades within the company.
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DiscoverGold
1 year ago
Oracle sees share price rise as institutional and insider ownership remains high
By: Investing | November 12, 2023
NEW YORK - Oracle Corporation (NYSE:ORCL), a leading technology firm with a market capitalization of $310 billion, recently experienced a 4.6% increase in its share price, reflecting the significant role institutional investors play in the company's stock performance. These investors hold 43% of Oracle's shares, aligning their interests with the company's long-term trends and contributing to its strong one-year return on investment of 48%.
The ownership structure of Oracle highlights insider confidence, with Lawrence Ellison, the Top Key Executive, owning 42% of the company. This level of insider ownership is often seen as a positive sign, indicating that board members are committed to investing alongside shareholders. However, it also raises questions about board accountability due to the concentration of voting power. The second and third largest shareholders hold approximately 5.1% and 4.4% of the stock, respectively, consolidating more than half of Oracle's shares among the top three shareholders.
Despite individual investors holding a smaller portion of the equity at 14%, their collective stake is enough to potentially influence company policies, even though they may not have the power to sway decisions on their own.
Investors are advised to consider analyst forecasts and be cognizant of potential warning signs that could affect Oracle's future performance. Analysts provide valuable insights into expected stock trends, which can help investors make informed decisions. The risk associated with a significant drop in share price due to possible simultaneous sell-offs by large institutional owners should be taken into account, especially given insiders' substantial control over $130 billion worth of shares.
As Oracle continues to be included in benchmark indexes, its appeal to institutional investors is likely to persist, making its role in shaping the company's stock price and policies an ongoing point of interest for market watchers.
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1 year ago
Oracle (ORCL) Integrates Nvidia’s AI Stack Into Its Cloud Marketplace
By: Investing | October 20, 2023
Oracle (NYSE:ORCL), the multinational computer technology corporation led by Larry Ellison, has formed a strategic partnership with Nvidia (NASDAQ:NVDA), a prominent player in the Semiconductors & Semiconductor Equipment industry with a market cap of 1020.0B USD, to incorporate the latter's high-end GPUs and comprehensive AI stack into Oracle Cloud Infrastructure (OCI). This move was announced on Friday and marks a significant advancement in Oracle's AI offerings.
The partnership enables customers to directly access Nvidia’s DGX Cloud AI supercomputing platform and AI Enterprise software for training AI models and developing generative AI applications on OCI. Customers can utilize their existing universal cloud credits for these services.
Karan Batta, senior vice president for Oracle Cloud Infrastructure, emphasized that the alliance with Nvidia, whose net income is expected to grow this year according to InvestingPro Tips, would provide organizations with an accelerated compute infrastructure. This infrastructure will expedite the deployment of Nvidia software and GPUs, thereby speeding up the roll-out of AI services.
The OCI marketplace now includes Nvidia DGX Cloud and AI Enterprise software, expanding its array of add-on solutions and services. Nvidia DGX Cloud is an AI-training-as-a-service platform that leverages Nvidia’s DGX technology to facilitate multi-node training of custom generative AI models. Nvidia AI Enterprise is an enterprise-grade toolkit that includes the Nvidia NeMo framework, TensorRT LLM open-source library, and Triton Inference server to optimize and standardize AI model deployment and execution.
Among the users of Nvidia’s AI stack on OCI are Gemelo.ai, led by CEO Paul Jaski, and the University at Albany in New York. Oracle has largely advanced its own AI capabilities through industry partnerships, such as its collaboration with Cohere to develop a service that simplifies the training of custom LLMs while ensuring data privacy and security. Oracle's internal application development teams are also utilizing this service in areas focused on HR and healthcare professionals.
Nvidia, with a P/E ratio of 99.27 and a revenue growth of 9.9 % according to InvestingPro, is a company that yields high returns on invested capital and has maintained dividend payments for 12 consecutive years. This information, coupled with the fact that Nvidia's stock price movements are quite volatile, makes it a company to watch closely in the AI and cloud computing sector.
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1 year ago
Oracle (ORCL) reasserts $65 billion revenue forecast for 2026 despite recent setbacks
By: Investing.com | September 21, 2023
Oracle Corp (NYSE:ORCL). has reaffirmed its yearly revenue projection of $65 billion by the fiscal year 2026, a forecast initially shared with investors a year ago. This reassertion comes despite recent quarterly results that left some investors disappointed. Oracle's Executive Vice President, Doug Kehring, restated these projections at the company's annual financial analysts' conference on Thursday. He expressed confidence in reaching the stated revenue goal, maintaining a 45% operating margin by fiscal 2026, and achieving an over 10% annual increase in earnings per share.
The company's strategic focus remains on expanding its cloud-computing rental business, an area where it has historically lagged behind competitors like Amazon.com Inc (NASDAQ:AMZN)., Microsoft Corp (NASDAQ:MSFT)., and Alphabet (NASDAQ:GOOGL) Inc.’s Google. However, investor optimism has been growing as Oracle's cloud services are believed to have the potential to grow rapidly and meet the high-demand computing needs of artificial intelligence products.
Kehring emphasized that Oracle's cloud infrastructure business, which generated $5 billion in revenue in the fiscal year ending May 2023, is targeting Google. However, this revenue represented only about 10% of Oracle's total income.
Investor enthusiasm was dampened last week when Oracle reported a 30% increase in cloud sales for the quarter, compared to a 54% surge in the previous period. This announcement led to a nearly 14% drop in Oracle's shares, marking the largest single-day decline in over two decades and pulling them down from an all-time peak.
Ahead of Thursday's event, many analysts anticipated that Oracle would maintain its outlook. To reach its target, the company needs to sustain an average annual sales growth rate of approximately 9% over the next three fiscal years.
However, given the recent slowdown in Oracle's electronic health records division Cerner (NASDAQ:CERN), which it acquired last year, and the ongoing shift to cloud services, some analysts, including Bloomberg Intelligence's Anurag Rana, believe this to be a challenging endeavor.
On Thursday, Oracle's shares fell by 2.8% to $109.65 at 3:13 p.m. in New York. Despite last week's drop, the stock had risen by 38% this year through Wednesday's close.
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1 year ago
Oracle introduces new healthcare-specific capabilities to boost productivity and patient care
By: Investing.com | September 18, 2023
In a bid to enhance financial visibility, streamline supply chains, and improve patient care, Oracle (NYSE:ORCL) has introduced new healthcare-specific capabilities to its Oracle Fusion Cloud Applications Suite. The move is aimed at helping healthcare organizations increase productivity, reduce costs, embrace new business models, and enhance decision making.
The healthcare sector is grappling with unpredictable demand and high administrative costs. The need for efficient and accessible healthcare is becoming more critical in the face of resource and supply shortages and the changing financial requirements of patient care. To navigate these challenges, healthcare organizations require greater visibility and collaboration across the entire delivery system.
To this end, Oracle has added new healthcare-specific capabilities to Oracle Fusion Cloud Enterprise Resource Planning (ERP), Oracle Fusion Cloud Enterprise Performance Management (EPM), and Oracle Fusion Cloud Supply Chain & Manufacturing (SCM). These enhancements will enable healthcare organizations to consolidate disconnected systems, automate critical processes, and provide the flexibility needed to support new delivery models ranging from telehealth to home and community-based care.
Steve Miranda, executive vice president of applications development at Oracle, emphasized the importance of increased integration and collaboration across the entire ecosystem in making healthcare more efficient, accessible, and equitable. He asserted that the new capabilities added to Oracle Fusion Applications Suite will help healthcare organizations adopt new business models, embrace rapid innovation, build agile and sustainable supply chains, and better serve patients' needs.
Oracle also introduced new workforce management capabilities within Oracle Fusion Cloud Human Capital Management (HCM) to help healthcare organizations adapt to changing labor markets and meet volatile customer demand. The new capabilities are designed to connect business and electronic health record (EHR) data on a single cloud platform, assisting healthcare organizations in navigating advanced scheduling and labor needs.
Chris Leone, Executive Vice President of Applications Development at Oracle, stated that frontline workers and healthcare organizations deserve intuitive tools that can respond to volatile patient demands while prioritizing flexibility and addressing burnout.
In related news, Providence, a Renton, Wash.-based 51-hospital system, announced its partnership with Oracle to merge its finance, human resources, and supply chain IT operations in the cloud. The move to Oracle's cloud-based applications suite allowed Providence to standardize a dozen formerly disparate systems. Providence CIO B.J. Moore praised the partnership for propelling them forward in the healthcare industry and positioning them for rapid innovation with advanced technologies such as generative AI.
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1 year ago
Oracle (ORCL) shares fall 12% on soft cloud guidance; Goldman flags 'lofty' expectations
By: Investing.com | September 12, 2023
Oracle Corporation (NYSE:ORCL) shares slumped by roughly 12% in early U.S. trading on Tuesday after the business software group offered a soft outlook for the current quarter and posted first-quarter revenue that narrowly missed estimates.
It is the biggest fall for the Texas-based company's shares since March 2020, and wipes almost $30 billion off of its market capitalization compared to its closing price on Monday. Meanwhile, the decline weighed on shares in rival SAP SE (ETR:SAPG) in Germany, dragging the stock down by more than 2%.
On a call following its most recent quarterly results, Oracle executives said they see total revenue in the fiscal second quarter growing 5% - 7%, missing estimates of 8.2% from analysts cited by Reuters. Adjusted profit was also projected to be between $1.30 and $1.34 per share during the three-month period. Analysts had pencilled in $1.33 a share.
Oracle's management attributed the weak outlook to the accelerated change in operations at its Cerner (NASDAQ:CERN) health records division. The unit is in the process of moving customers to cloud subscriptions and away from license purchases, which are recognized upfront.
"This transition is resulting in some near-term headwinds to the Cerner growth rate," Oracle Chief Executive Officer Safra Catz said on the earnings call.
In a note to clients, Goldman Sachs analysts said the second-quarter guidance "fell short of lofty expectations."
Oracle, which sells database software and technology, is in a race with players like Amazon (NASDAQ:AMZN) Web Services and Microsoft (NASDAQ:MSFT)'s Azure to develop its cloud technology. However, the effort has been hampered by a slowdown in tech spending by businesses wary of an uncertain economic environment.
Cloud services and license support revenues grew by 13% year-on-year to $9.5 billion in the first quarter, but cloud license and on-premise license revenues slipped 11% to $809 million. Despite increasing by 8.8% annually, the group-wide top-line result of $12.45B narrowly missed Bloomberg consensus expectations of $12.47B.
On an adjusted basis, income per share came in at $1.19, above projections of $1.15.
Many analysts remained bullish over Oracle's prospects, arguing that the share price decrease was likely due to a surge in the stock prior to the earnings. Shares have jumped by more than 50% year-to-date.
"Do these results change our thesis on Oracle? No," analysts at Guggenheim said.
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1 year ago
Oracle sees revenue below estimates as cloud spending sputters
By: Investing.com | September 11, 2023
(Reuters) -Oracle projected current-quarter revenue below Wall Street targets on Monday and narrowly missed expectations for the first quarter as a tough economy pressured cloud spending by businesses, sending its shares down 9% in extended trading.
After a surge in cloud demand during the pandemic, businesses are rethinking their digitization plans, hurting Oracle (NYSE:ORCL) as it plays catch-up in a segment dominated by larger rivals such as Amazon (NASDAQ:AMZN) Web Services and Microsoft (NASDAQ:MSFT).
Still, analysts have said that the rise in adoption of artificial intelligence (AI) applications could boost Oracle's cloud infrastructure business because the advances made in its networking technology are more suited to take on AI workloads.
"As of today, AI development companies have signed contracts to purchase more than $4 billion of capacity in Oracle's Gen2 Cloud. That's twice as much as we had booked at the end of Q4," Oracle Chairman and CTO Larry Ellison said.
Ellison, a self-described close friend of Elon Musk, announced that the Tesla (NASDAQ:TSLA) CEO's AI startup xAI had signed a contract to train AI models in Oracle's Gen2 Cloud.
He also said all nine utility companies owned by Berkshire Hathaway (NYSE:BRKa) will replace their existing enterprise resource planning systems with Oracle's Fusion Cloud applications.
Shares of Oracle have gained about 55% so far this year.
The firm forecast second-quarter revenue growth of between 5% and 7%, lower than analysts' average estimate of 8.2%, according to LSEG data. It also expects adjusted profit between $1.30 and $1.34 per share, compared with expectations of $1.33.
Revenue for the first quarter stood at $12.45 billion, slightly below estimates of $12.47 billion.
Excluding items, it earned $1.19 per share, compared with estimates of $1.15.
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1 year ago
Oracle (ORCL) Stock Set to Open at Record High Before Earnings
By: Schaeffer's Investment Research | September 11, 2023
• Oracle will report earnings after the close today
• Citigroup hiked its price target ahead of the event
Cloud concern Oracle Corporation (NYSE:ORCL) will report fiscal first-quarter earnings after the close today. Oracle stock is down 1.2% in premarket trading, after Citigroup issued a pre-earnings price-target lift to $138 from $121.
Digging into earnings history, Oracle stock closed has a mixed next-day response. In fact, ORCL fell following its September, December, and March reports, but staged a small rally after its June earnings call. Shares averaged a post-earnings swing of 4.5% over the past two years, regardless of direction. However, the options market is pricing in a slightly larger-than-usual 5.9% move this time around.
Should these premarket gains hold, Oracle stock will open just below the $128 level, giving it a chance to surpass its June 15, all-time high of $127.54. The equity fell back below its 50-day moving average during the broader market's August pullback, but gapped higher on the charts towards the end of the month, winning nine of its last 10 sessions. Year over year, ORCL is nearly 70% higher.
Coming into today, analysts are split on their sentiment. While 11 consider the security a "strong buy," the remaining 12 in coverage recommend a tepid "hold." At the same time, Oracle stock's average 12-month price target of $127.92 is a razor-then 0.05% premium to Friday's close.
In the options pits, sentiment has also been leaning quite bullish. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) currently shows the stock with a 50-day call/put volume ratio of 2.50. This lofty ratio, sitting in the 83rd percentile of annual readings, means that more than double the amounts of calls have been purchased over puts during the past two weeks of trading.
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1 year ago
Oracle (ORCL): A Heavily In-Demand Stock
By: Lucas Downey | September 9, 2023
• Oracle Corp. (ORCL) shares are racing higher in 2023, up 55%. Heavy unusual demand for the stock is powering this uptrend.
Oracle Shares Attract Big Money Inflows
Want an edge in trading? Follow the Big Money.
What’s Big Money? Said simply, it’s when a stock rises due to institutional demand. Top stocks tend to attract savvy investors.
You see, fund managers are always looking to bet on the next outperforming stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.
The YTD action tells the story. Each green bar signals unusual increasing volumes in ORCL shares, pushing the stock higher. We believe this to be institutional demand:
Source: www.mapsignals.com
Few stocks have charts this strong. Recent green bars suggest healthy demand. But, what about the fundamental story?
Oracle Fundamental Analysis
Next, I want to make sure the fundamental story is healthy too. As you can see, ORCL has had positive sales and EPS growth in recent years:
• 3-year sales growth rate (+8.7%)
• 3-year EPS growth rate (+9.3%)
Source: FactSet
Marrying great fundamentals with our proprietary Big Money software has found some big winning stocks over the long-term.
Check this out. Oracle has been a top-rated stock at MAPsignals. That means the stock has had buy pressure and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.
It’s made the rare Top 20 report numerous times. The blue bars below shows when ORCL was a top pick:
Source: www.mapsignals.com
Tracking unusual volumes reveals the power of the MAPsignals process.
Don’t fight the Big Money!
Oracle Price Prediction
The Oracle rally has been in place all year. Big Money buying in the shares is signaling to take notice. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.
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1 year ago
Earnings Preview: Oracle (NYSE: ORCL)
By: 24/7 Wall St. | September 8, 2023
After U.S. markets closed on Wednesday, DocuSign beat the consensus earnings per share (EPS) estimate by 9.1% and the revenue estimated by about 1.5%. Revenue was up 10.5% year over year in the quarter. DocuSign also raised third-quarter and fiscal-year revenue guidance. Shares traded down about 4.6% shortly after Friday’s opening bell.
Smith & Wesson also beat Wall Street estimates on both the top and bottom lines. Sales rose 35.3% year over year while gross margin slipped by nearly 10 percentage points. CFO Deana McPherson said the company is confident it can reach its gross margin target of at least 32% for the full year. The company pays a dividend yield of 4.09%, another reason investors took the stock nearly 19% higher early Friday.
Before markets opened on Friday, Kroger beat the consensus EPS estimate by 5.5% but missed the revenue estimate slightly. Revenue was down 2.3% year over year. More important, perhaps, the company announced the sale of 413 stores, eight distribution centers, two offices and five private label brands in 17 states and the District of Columbia to privately held C&S Wholesale Grocers for approximately $1.9 billion in cash.
Kroger also announced an agreement in principle to settle lawsuits related to claims against the company related to opioid sales. The deal resulted in a charge of $1.4 billion, resulting in a decline of $1.54 in second-quarter EPS. The stock traded up about 0.9%
FuelCell Energy is on deck to report quarterly earnings first thing Monday morning. Then later that day, Oracle Corp. (NYSE: ORCL) will take its turn in the earnings spotlight. Here is what analysts expect from that report.
The software and cloud-computing giant has added almost 68% to its share price over the past 12 months, including a 53% jump in 2023. Since posting a 52-week high in mid-June, the stock has slipped by about 1.5%. An analyst upgrade announced Tuesday added about 2% to the share price, so there is some optimism that the venerable company will be able to grow its software and cloud infrastructure businesses with a boost from AI.
Of 34 analysts covering the stock, 17 have a Buy or Strong Buy rating and 16 have Hold ratings. At a recent price of around $125.00 a share, the upside potential based on a median price target of $133.00 is 6.4%. At the high price target of $150.00, the upside potential is 20%.
For the first quarter of fiscal 2024, revenue is forecast at $12.47 billion, which would be down 9.9% sequentially but up 9.1% year over year. Adjusted EPS are pegged at $1.15, down 31.2% sequentially and 11.7% higher year over year. For the full fiscal year ending next May, current estimates call for EPS of $5.57, up 8.7%, on sales of $54.13 billion, up 8.4%.
Oracle stock trades at 22.5 times expected 2024 EPS, 19.8 times estimated 2025 earnings of $6.31 and 17.4 times estimated 2026 earnings of $7.59 per share. Its 52-week trading range is $60.78 to $127.54. The company pays an annual dividend of $1.60 (yield of 1.32%). Total shareholder return for the past year is 70.64%.
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1 year ago
Oracle (ORCL) Stock Upgraded on AI Tailwinds
By: Schaeffer's Investment Research | August 29, 2023
• UBS upgraded ORCL to "buy" from "neutral"
• ORCL's options pits have been extremely bullish in the last 10 weeks
Oracle Corp (NYSE:ORCL) is up 2.2% at $119.36 at last glance, after UBS upgraded the software stock to "buy" from "neutral," with a price-target hike to $140 from $120. The firm noted the shares have "plenty of room to run," and pointed out that it looks as though artificial intelligence (AI) start-ups are increasing their use of Oracle Cloud Infrastructure.
Out of the gate, ORCL traded at its highest level since July 19. However, today's pop is now running out of steam around $120, an area of consolidation since a June 15 record high of $127.54. Year-to-date, the equity is up 45.8%.
In the options pits, ORCL calls have been picked up at their fastest pace all year. The security's 50-day call/put volume ratio of 2.64 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than all other readings from the past 12 months. Today, 14,000 calls have been exchanged so far in comparison to 8,173 puts.
Of the 33 analysts in coverage, 14 carry a "buy" or better rating on Oracle stock, with 19 a tepid "hold." Meanwhile, the 12-month consensus price target of $125.63 is a 5% premium to current levels.
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1 year ago
Oracle now the most crowded name in software but Bernstein has increased confidence
By: Investing.com | August 21, 2023
Oracle (NYSE:ORCL) is now the most crowded name in software, according to Bernstein analysts in a note Monday.
The analysts' research note states investors now recognize the downside protection of Outperform-rated Oracle's enterprise business and that "organic, CC growth is accelerating."
"Oracle has been going through a complex transition to Cloud, which has created different growth rates for different parts of the business," they wrote. "This has been hard to model, and their acquisition of Cerner has only made it more complex."
However, Bernstein believes Oracle's organic growth is now accelerating, primarily driven by an increasing mix of fast-growing cloud revenue and "acceleration in the growth of Cloud, particularly OCI Gen 2."
"We saw a similar trend play out at MSFT as it transitioned to Cloud," said the analysts, who maintained a $242 price target on the stock. "Based on the current setup, management commentary, and execution over the past three years, we have increased confidence in the durability of growth and further acceleration in the current year. We think Oracle can sustain high-single-digit or even higher growth in the foreseeable future."
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1 year ago
Oracle (ORCL) Stock Still Looks Cheap - Especially For Short Put Plays
By: Barchart | August 14, 2023
Oracle Corp (ORCL) stock still looks cheap to value buyers, given its 20x forward P/E multiple and Oracle's massive FCF generation. ORCL stock has been treading water lately, which is ideal for selling short out-of-the-money (OTM) put options.
For example, ORCL closed at $113.06 per share on Friday, Aug. 11, down just 4.1% from the end of July when it closed at $117.91. That means that traders who sell short OTM puts can collect extra income with near-term expiration plays.
In fact, I discussed this situation in our recent July 25, 2023, Barchart article, “Oracle Corp Stock Is Treading Water - Ideal For Traders Shorting OTM Puts.”
Huge Free Cash Flow
For example, I pointed out that Oracle made $8.47 billion in its fiscal Q4 ending May 30, on a trailing 12-month (TTM) basis. That was up 68% from the $5.028 billion in TTM FCF it made a year ago. This is because Oracle benefits from both the growth in cloud spending and as well as from AI-related initiatives.
It also works out to a 16.9% FCF margin based on its $50 billion in fiscal 2023 TTM revenue. So, going forward, we can expect that Oracle will generate a pile of FCF.
Oracle Corp - FCF Growth - Fiscal Q4 on a TTM basis
For example, analysts surveyed by Seeking Alpha forecast that revenue ending May 2024 will reach $54.11 billion, up 8.2% from $50 billion last year. So, if we apply this 17% FCF margin against this revenue projection, FCF could hit $9.2 billion.
That FCF estimate represents about 3.0% of its $307 billion market capitalization. Typically tech stocks like this can trade with a 2% FCF yield to a 3.33% yield. This is the same as trading at 30x to 50x FCF.
Therefore, on average we might expect ORCL stock to trade at least at 40x FCF, i.e., $368 billion (i.e., 40x $9.2 billion). That represents a potential 20% upside (i.e., $368b/$307b-1). In other words, ORCL stock could move up to $135.62 (i.e., 20% higher than $113.06).
One way to conservatively play this is to short out-of-the-money (OTM) puts, along with holding ORCL stock.
Shorting OTM ORCL Puts
For example, traders can look at selling short Sept. 1, 2023, expiration puts at the $109 strike price and then collect $1.19 per contract. That strike price is 3.59% below today's spot price of $113.06 per share (Aug. 11 close).
ORCL Puts - Expiring Sept. 1, 2023 - Barchart - As of Aug. 11, 2023
Here is how this works. First, the trader puts $10,900 or more in their brokerage account, either with cash and/or a mix of cash and margin. For example, holding 100 shares of ORCL stock will provide a certain amount of margin (i.e., typically 50%).
Next, they can enter an order to “Sell to Open” one put contract at $109 per share. The brokerage account will then immediately receive $119.00 from selling short the $109 put strike price.
OTM Put Yields And Returns
So, that represents about 1.09%, i.e., $119/$10,900 invested, with just 3 weeks until expiration. So, if that trade can be repeated every 3 weeks, it works out to an annualized 18.53% rate of return (i.e., 1.09% x 17x).
There is always the risk that ORCL could fall to $109 or below on or before Sept. 1. However, at least in that situation, the investor does not have to sell his shares in ORCL. They would be required to use the $10,900 to purchase 100 shares at $109 per share. That may or may not result in an unrealized loss, but it could also potentially lower the investor's average cost.
To help avoid this situation, a more conservative play would be to sell short the $108 strike price, or even lower. That strike premium is at $0.97, which represents a lower 0.90% premium yield (i.e., $0.97/$108).
And keep in mind that even if the short put play gets exercised, the investor can always turn around and sell short OTM calls, known as “covered call” plays. This can help ameliorate any unrealized loss.
The bottom line is that given Oracle's huge free cash flow, ORCL stock's upside is significant. One way to conservatively play this is to short OTM put options for extra income.
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1 year ago
Oracle Co. (ORCL) Short Interest Update
By: MarketBeat | July 28, 2023
• Oracle Co. (NYSE:ORCL) saw a significant decrease in short interest in the month of July. As of July 15th, there was short interest totalling 13,940,000 shares, a decrease of 14.8% from the June 30th total of 16,360,000 shares. Currently, 0.9% of the shares of the stock are short sold. Based on an average daily trading volume, of 10,310,000 shares, the days-to-cover ratio is presently 1.4 days...
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