You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
For the first quarter of fiscal 2025, total revenues are expected to grow 6% to 8% at cc and 5% to 7% in dollar terms.
The Zacks Consensus Estimate for revenues is currently pegged at $13.22 billion, suggesting growth of 6.14% from the year-ago quarter’s reported figure.
The company’s non-GAAP EPS is expected to grow 10% to 14% and be in the range of $1.31-$1.35. The consensus mark for earnings is pegged at $1.32 per share, unchanged over the past 30 days. The figure indicates 10.9% growth from the year-ago period.
Image Source: Zacks Investment Research
In the last reported quarter, Oracle delivered a negative earnings surprise of 0.61%. Markedly, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing the same once, the average being 2.06%.
Our proven model does not conclusively predict an earnings beat for Oracle this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Accelerated digital transformation, along with the mainstream adoption of the hybrid/flexible work model, is likely to have driven demand for Oracle Cloud Infrastructure (“OCI”) services and the company’s other cloud-based applications in the to-be-reported quarter wherein Oracle OCI was selected by Hitachi Construction Machinery Co., Ltd. to migrate the latter’s large-scale, mission-critical business systems.
In the quarter under review, Oracle announced a partnership with Alphabet (GOOGL - Free Report) -owned Google that gives customers the choice to combine OCI and Google Cloud technologies to help accelerate their application migrations and modernization.
The company's cloud-based applications, encompassing NetSuite Enterprise Resource Planning (ERP) and Fusion ERP, are witnessing strong adoption, bolstering Oracle's position in the rapidly evolving enterprise software landscape.
Furthermore, Oracle's Gen 2 Cloud architecture is delivering superior performance at a lower cost, leveraging high-bandwidth and low-latency RDMA networks, thereby offering a compelling value proposition to customers. With its continued investment in expanding its cloud infrastructure footprint, Oracle is strategically positioning itself for sustained growth in the dynamic and fiercely competitive software industry.
In the to-be-reported quarter, Ackermans successfully implemented the Oracle Retail Merchandise Financial Planning Cloud Service (MFP), replacing the former Enterprise Planning (EP) system.
The robust adoption of the company’s generative artificial intelligence (AI) services holds promise. Oracle's collaboration with NVIDIA has been extended to provide sovereign AI solutions to customers worldwide. By combining NVIDIA's full-stack AI platform with Oracle's Enterprise AI, which is deployable across various OCI environments, customers gain greater control over operations, location and security, enabling them to meet data sovereignty requirements.
Price Performance & Valuation
Shares of ORCL have gained 33.5% year to date compared with the Zacks Computer and Technology sector’s growth of 16%. While this performance may be encouraging for investors, it's important to consider whether the stock's current valuation accurately reflects the company's long-term growth potential and ability to navigate the competitive landscape.
Oracle operates in a highly competitive market, facing intense competition from established tech giants like Microsoft (MSFT - Free Report) , Amazon (AMZN - Free Report) and Google, as well as newer players like Snowflake and Databricks.
While Oracle has a strong foothold in the database management and ERP software markets, its competitors are making significant inroads in the cloud space. AWS, Google Cloud and Microsoft Azure combined accounted for a whopping 67% of the $76 billion global cloud services market in the first quarter of 2024, according to new data from IT market research firm Synergy.
It is also important to consider whether the stock's current valuation accurately reflects the company's long-term growth potential and ability to navigate the competitive landscape.
ORCL is trading at a premium with a price/book of 41.98X compared with the Zacks Computer-Software industry’s 9.19X, reflecting a stretched valuation.
ORCL’s Price/Book Ratio Depicts Stretched Valuation
Image Source: Zacks Investment Research
Investment Considerations: Balancing Risk and Reward
Oracle is a compelling investment opportunity due to its strong position in the enterprise software market, particularly in database management systems. The company's shift toward cloud-based solutions, including its OCI and cloud applications, positions it well for future growth. Oracle's acquisition strategy, notably its purchase of healthcare IT provider Cerner, expands its reach into new markets. The company's consistent revenue growth, high profit margins and commitment to returning value to shareholders through dividends and share repurchases are attractive features. Oracle's strong partnerships with large enterprises and its focus on industry-specific solutions provide a competitive edge, making it a potentially rewarding long-term investment.
Conclusion
Oracle's cloud growth strategy, financial projections and technological advancements make it a compelling case for potential investors. The company's strategic partnerships, focus on AI and machine learning and expansion into key verticals demonstrate a forward-thinking approach, making the stock worth buying ahead of fiscal first-quarter 2025 results.
In-Depth Zacks Research for the Tickers Above
Normally $25 each - click below to receive one report FREE:
Oracle (ORCL - Free Report) is scheduled to report its fiscal first-quarter 2025 results on Sept. 9.
For the first quarter of fiscal 2025, total revenues are expected to grow 6% to 8% at cc and 5% to 7% in dollar terms.
The Zacks Consensus Estimate for revenues is currently pegged at $13.22 billion, suggesting growth of 6.14% from the year-ago quarter’s reported figure.
The company’s non-GAAP EPS is expected to grow 10% to 14% and be in the range of $1.31-$1.35. The consensus mark for earnings is pegged at $1.32 per share, unchanged over the past 30 days. The figure indicates 10.9% growth from the year-ago period.
Image Source: Zacks Investment Research
In the last reported quarter, Oracle delivered a negative earnings surprise of 0.61%. Markedly, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing the same once, the average being 2.06%.
Oracle Corporation Price and EPS Surprise
Oracle Corporation price-eps-surprise | Oracle Corporation Quote
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Oracle this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Oracle has an Earnings ESP of 0.00% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Shape Oracle’s Upcoming Results
Accelerated digital transformation, along with the mainstream adoption of the hybrid/flexible work model, is likely to have driven demand for Oracle Cloud Infrastructure (“OCI”) services and the company’s other cloud-based applications in the to-be-reported quarter wherein Oracle OCI was selected by Hitachi Construction Machinery Co., Ltd. to migrate the latter’s large-scale, mission-critical business systems.
In the quarter under review, Oracle announced a partnership with Alphabet (GOOGL - Free Report) -owned Google that gives customers the choice to combine OCI and Google Cloud technologies to help accelerate their application migrations and modernization.
The company's cloud-based applications, encompassing NetSuite Enterprise Resource Planning (ERP) and Fusion ERP, are witnessing strong adoption, bolstering Oracle's position in the rapidly evolving enterprise software landscape.
Furthermore, Oracle's Gen 2 Cloud architecture is delivering superior performance at a lower cost, leveraging high-bandwidth and low-latency RDMA networks, thereby offering a compelling value proposition to customers. With its continued investment in expanding its cloud infrastructure footprint, Oracle is strategically positioning itself for sustained growth in the dynamic and fiercely competitive software industry.
In the to-be-reported quarter, Ackermans successfully implemented the Oracle Retail Merchandise Financial Planning Cloud Service (MFP), replacing the former Enterprise Planning (EP) system.
The robust adoption of the company’s generative artificial intelligence (AI) services holds promise. Oracle's collaboration with NVIDIA has been extended to provide sovereign AI solutions to customers worldwide. By combining NVIDIA's full-stack AI platform with Oracle's Enterprise AI, which is deployable across various OCI environments, customers gain greater control over operations, location and security, enabling them to meet data sovereignty requirements.
Price Performance & Valuation
Shares of ORCL have gained 33.5% year to date compared with the Zacks Computer and Technology sector’s growth of 16%. While this performance may be encouraging for investors, it's important to consider whether the stock's current valuation accurately reflects the company's long-term growth potential and ability to navigate the competitive landscape.
Oracle operates in a highly competitive market, facing intense competition from established tech giants like Microsoft (MSFT - Free Report) , Amazon (AMZN - Free Report) and Google, as well as newer players like Snowflake and Databricks.
While Oracle has a strong foothold in the database management and ERP software markets, its competitors are making significant inroads in the cloud space. AWS, Google Cloud and Microsoft Azure combined accounted for a whopping 67% of the $76 billion global cloud services market in the first quarter of 2024, according to new data from IT market research firm Synergy.
It is also important to consider whether the stock's current valuation accurately reflects the company's long-term growth potential and ability to navigate the competitive landscape.
ORCL is trading at a premium with a price/book of 41.98X compared with the Zacks Computer-Software industry’s 9.19X, reflecting a stretched valuation.
ORCL’s Price/Book Ratio Depicts Stretched Valuation
Image Source: Zacks Investment Research
Investment Considerations: Balancing Risk and Reward
Oracle is a compelling investment opportunity due to its strong position in the enterprise software market, particularly in database management systems. The company's shift toward cloud-based solutions, including its OCI and cloud applications, positions it well for future growth. Oracle's acquisition strategy, notably its purchase of healthcare IT provider Cerner, expands its reach into new markets. The company's consistent revenue growth, high profit margins and commitment to returning value to shareholders through dividends and share repurchases are attractive features. Oracle's strong partnerships with large enterprises and its focus on industry-specific solutions provide a competitive edge, making it a potentially rewarding long-term investment.
Conclusion
Oracle's cloud growth strategy, financial projections and technological advancements make it a compelling case for potential investors. The company's strategic partnerships, focus on AI and machine learning and expansion into key verticals demonstrate a forward-thinking approach, making the stock worth buying ahead of fiscal first-quarter 2025 results.