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Oracle (ORCL)
NYSE:ORCL
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Oracle
(NYSE:ORCL)
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Rating:71Outperform
Price Target:
$363.00
▲(17.61% Upside)
Oracle's strong earnings call, highlighting growth in cloud services and strategic positioning in AI, is the most significant factor driving the score. Financial performance shows strong profitability but is offset by high leverage and negative free cash flow. Technical analysis indicates bullish momentum but suggests caution due to overbought signals. Valuation is a concern with a high P/E ratio and low dividend yield.
Positive Factors
Cloud Revenue Growth
Oracle's strong growth in cloud services underscores its strategic positioning in the rapidly expanding cloud market, enhancing long-term revenue potential.
AI Workload Adoption
Partnerships with AI leaders position Oracle as a key player in AI infrastructure, driving future growth and competitive advantage in the tech industry.
Multi-Cloud Database Revenue
The surge in multi-cloud database revenue highlights Oracle's successful integration with major cloud platforms, expanding its market reach and customer base.
Negative Factors
High Leverage
Significant leverage poses a risk to Oracle's financial stability, potentially impacting its ability to invest in growth opportunities and manage economic downturns.
Negative Free Cash Flow
Negative free cash flow indicates potential liquidity issues, which could constrain Oracle's ability to fund operations and strategic initiatives without increasing debt.
Slight Decline in Software Revenue
A decline in software revenue suggests challenges in maintaining growth in traditional segments, which may affect Oracle's overall revenue diversification strategy.
Oracle (ORCL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$877.12B
Dividend Yield0.58%
Average Volume (3M)23.58M
Price to Earnings (P/E)71.5
Beta (1Y)1.49
Revenue Growth9.67%
EPS Growth11.23%
CountryUS
Employees159,000
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)1.47
Shares Outstanding2,841,714,000
10 Day Avg. Volume49,845,232
30 Day Avg. Volume23,583,078
Financial Highlights & Ratios
PEG Ratio2.17
Price to Book (P/B)22.57
Price to Sales (P/S)8.04
P/FCF Ratio-1.17K
Enterprise Value/Market Cap0.87
Enterprise Value/Revenue12.86
Enterprise Value/Gross Profit16.65
Enterprise Value/Ebitda32.76
Forecast
1Y Price Target
$341.45Price Target Upside10.62% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering33
Oracle Business Overview & Revenue Model
Company DescriptionOracle 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 MoneyOracle generates revenue primarily through a combination of software licensing, cloud services, and hardware systems. Its key revenue streams include subscription-based cloud services, which have seen significant growth as businesses migrate to cloud solutions, and software licensing fees for its on-premises database and applications. Additionally, Oracle earns revenue from services such as consulting, support, and training associated with its products. The company has formed strategic partnerships with other technology firms, enhancing its cloud offerings and expanding its market reach, which also contributes to its earnings. Oracle's focus on innovation and investment in research and development further drives its competitive advantage in the technology sector.
Oracle Key Performance Indicators (KPIs)
Any
Revenue by Segment
Analyzes revenue from different business units, indicating Oracle's strengths and potential areas for growth or concern based on market demand and competition.
Analyzes revenue from different business units, indicating Oracle's strengths and potential areas for growth or concern based on market demand and competition.
Data provided by:
Main Street Data
Main Street DataOracle Earnings Call Summary
Earnings Call Date:Sep 09, 2025
(Q1-2026)
| % Change Since: |
Next Earnings Date:Dec 15, 2025
Earnings Call Sentiment Positive
The earnings call presented a highly positive outlook for Oracle, with significant growth in cloud services, particularly in AI workloads and multi-cloud databases. The substantial increase in RPO and ambitious future revenue projections highlight strong market positioning. However, challenges remain with negative free cash flow and a slight decline in software revenue.Q1-2026 Updates
Positive Updates
Record Cloud Revenue Growth
Total cloud revenue increased by 27% to $7.2 billion, with cloud infrastructure revenue up 54% to $3.3 billion and cloud database services up 32% with annualized revenues nearing $2.8 billion.
Significant Increase in Remaining Performance Obligations (RPO)
RPO reached $455 billion, marking a 359% increase from last year, and a $317 billion increase from Q4, driven by demand for Oracle Cloud infrastructure.
Strong AI Workload Adoption
Oracle has signed cloud contracts with major players like OpenAI, xAI, Meta, NVIDIA, and AMD, positioning itself as a leader in AI workloads.
Multi-Cloud Database Revenue Surge
Multi-cloud database revenue grew by 1529% in Q1, with Oracle regions being embedded in AWS, Azure, and GCP.
Ambitious Future Revenue Projections
Oracle expects Oracle Cloud Infrastructure to grow 77% to $18 billion in the current fiscal year, with projections reaching $144 billion over the next four years.
Adoption of AI in Internal Operations
Oracle is adopting AI internally to increase efficiency, with an expectation of mid-teens growth in operating income this year.
Negative Updates
Free Cash Flow Challenges
Free cash flow was negative at $362 million for Q1, with capital expenditures of $8.5 billion.
Slight Decline in Software Revenue
Total software revenue for the quarter was $5.7 billion, marking a 2% decrease.
Company Guidance
During Oracle Corporation's Q1 FY2026 earnings call, several key metrics were highlighted that underscore the company's robust growth and strategic positioning in the AI and cloud markets. Oracle reported a total cloud revenue increase of 27%, reaching $7.2 billion, with cloud infrastructure revenue growing by 54% to $3.3 billion. The company's remaining performance obligations (RPO) surged to $455 billion, up 359% from the previous year and $317 billion from Q4, indicating substantial future revenue potential. Additionally, Oracle's multi-cloud database revenue saw a remarkable growth of 1529% in Q1. The guidance for FY2026 anticipates a 16% total revenue growth in constant currency, with Oracle Cloud Infrastructure projected to grow 77% to $18 billion and further expand to $144 billion over the next four years. Oracle also reported a non-GAAP EPS of $1.47 and a GAAP EPS of $1.01 for the quarter, with a non-GAAP tax rate slightly higher than expected, impacting EPS by $0.03. The company outlined a CapEx plan of approximately $35 billion for FY2026 to support the anticipated growth.Oracle Financial Statement Overview
Summary
Oracle demonstrates strong profitability with high margins and return on equity. However, high debt levels and negative free cash flow present potential risks, necessitating careful management of leverage and cash flow for sustained financial health.Income Statement
Oracle's income statement shows strong profitability with a high gross profit margin of 77.23% and a solid net profit margin of 21.08% for TTM (Trailing-Twelve-Months). Revenue growth is moderate at 2.82% TTM, indicating steady expansion. EBIT and EBITDA margins are robust at 30.50% and 39.26% respectively, reflecting efficient operations. Overall, Oracle demonstrates strong profitability and stable growth, though revenue growth could be more aggressive.85
Very Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 4.36 TTM, indicating significant leverage, which could pose a risk if not managed carefully. However, the return on equity is impressive at 66.28%, showcasing effective use of equity to generate profits. The equity ratio is relatively low, suggesting a reliance on debt financing. While profitability is strong, the high leverage warrants caution.70
Positive
Cash Flow
Oracle's cash flow statement shows a concerning negative free cash flow of -$5.88 billion TTM, despite a significant growth rate of 1392.39%. The operating cash flow to net income ratio is moderate at 0.54, indicating decent cash generation relative to net income. However, the negative free cash flow to net income ratio of -0.27 highlights potential liquidity issues. While operating cash flow is strong, the negative free cash flow is a critical area to address.60
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 59.02B | 57.40B | 52.96B | 49.95B | 42.44B | 40.48B |
| Gross Profit | 45.58B | 40.47B | 37.82B | 36.39B | 33.56B | 32.62B |
| EBITDA | 23.17B | 23.91B | 21.39B | 18.74B | 13.53B | 18.41B |
| Net Income | 12.44B | 12.44B | 10.47B | 8.50B | 6.72B | 13.75B |
Balance Sheet | ||||||
| Total Assets | 180.45B | 168.36B | 140.98B | 134.38B | 109.30B | 131.11B |
| Cash, Cash Equivalents and Short-Term Investments | 11.01B | 11.20B | 10.66B | 10.19B | 21.90B | 46.55B |
| Total Debt | 105.41B | 104.10B | 94.47B | 90.48B | 75.86B | 84.25B |
| Total Liabilities | 155.78B | 147.39B | 131.74B | 132.83B | 115.06B | 125.16B |
| Stockholders Equity | 24.15B | 20.45B | 8.70B | 1.07B | -6.22B | 5.24B |
Cash Flow | ||||||
| Free Cash Flow | -5.88B | -394.00M | 11.81B | 8.47B | 5.03B | 13.75B |
| Operating Cash Flow | 21.53B | 20.82B | 18.67B | 17.16B | 9.54B | 15.89B |
| Investing Cash Flow | -27.66B | -21.71B | -7.36B | -36.48B | 11.22B | -13.10B |
| Financing Cash Flow | 5.89B | 1.10B | -10.55B | 7.91B | -29.13B | -10.38B |
Oracle Technical Analysis
Positive
308.66
Price Trends
251.70
Positive
216.67
Positive
187.80
Positive
Market Momentum
18.16
Negative
66.21
Neutral
61.84
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ORCL, the sentiment is Positive. The current price of 308.66 is above the 20-day moving average (MA) of 261.83, above the 50-day MA of 251.70, and above the 200-day MA of 187.80, indicating a bullish trend. The MACD of 18.16 indicates Negative momentum. The RSI at 66.21 is Neutral, neither overbought nor oversold. The STOCH value of 61.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ORCL.
Oracle Risk Analysis
Oracle disclosed 31 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | 3.85T | 37.97 | 29.65% | 0.64% | 14.93% | 15.50% | |
80 Outperform | 139.26B | 130.11 | 14.49% | ― | 14.87% | -57.43% | |
79 Outperform | 155.21B | 22.79 | 59.11% | ― | 10.69% | 35.23% | |
71 Outperform | $877.12B | 71.45 | 71.15% | 0.58% | 9.67% | 11.23% | |
71 Outperform | 432.69B | 606.15 | 12.87% | ― | 38.79% | 78.37% | |
67 Neutral | 92.04B | 38.79 | 7.23% | ― | 3.21% | 31.64% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
Performance Comparison
ORCL
Oracle
308.66
144.43
87.94%
ADBE
Adobe
365.90
-161.97
-30.68%
MSFT
Microsoft
517.93
87.65
20.37%
PANW
Palo Alto Networks
208.19
36.11
20.98%
SNPS
Synopsys
495.50
-10.29
-2.03%
PLTR
Palantir Technologies
182.39
144.44
380.61%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.