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Tech stocks have delivered remarkable returns in 2024, with investors regularly clamoring for exposure. One of those stocks in particular, Oracle (ORCL - Free Report) , recently delivered quarterly results that caused shares to melt higher post-earnings.
The company offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. Up more than 60% in 2024, the company’s quarterly results have regularly brought post-earnings fireworks, as shown below.
Image Source: Zacks Investment Research
Let’s take a closer look at the release and how the company currently stacks up.
Oracle Reports Record Backlog
Concerning headline figures, Oracle exceeded both consensus earnings and revenue expectations, with EPS growing 24% year-over-year alongside a 7% sales increase.
The company’s Cloud segment paved the way for a robust release, with Cloud services revenue climbing 21% and now reflecting the company’s largest business overall. Thanks to the robust performance within its Cloud segment, the company saw a growth acceleration in both operating income and EPS.
As shown below, the company’s top line stayed rather stagnant for some time before seeing an acceleration over recent years.
Image Source: Zacks Investment Research
Importantly, Oracle’s remaining performance obligation (RPO) melted 53% higher year-over-year to a record $99 billion, which forecasts strong sales growth throughout its current year (FY25).
ORCL to Benefit From Hyperscalers
The company also announced that it’s signed a MultiCloud agreement with Amazon’s (AMZN - Free Report) AWS, likely reflecting the biggest highlight of the release overall. AWS remains the cloud infrastructure market leader, with customers expected to receive access to the Oracle database when it goes live later in December.
It’s worth noting here that Amazon isn’t the only Hyperscaler (large cloud service provider) that Oracle is in business with, as it’s already inked MultiCloud agreements with both Microsoft Azure and Google Cloud as well. All these deals bode highly favorable for the company, with customers able to utilize its database technology within every Hyperscaler’s Cloud.
Are Shares Expensive?
The valuation picture for the stock is currently rich, with the current 25.3X forward 12-month earnings multiple sitting near the high end of the five-year range. The steeper multiple is reflective of investors’ growth expectations, with the current 2.3X PEG ratio also near the high end of the five-year range.
Image Source: Zacks Investment Research
Shareholders Get Paid
The company also boasts a shareholder-friendly nature, currently carrying a sizable 14% five-year annualized dividend growth rate paired with a sustainable payout ratio sitting at 34% of its earnings. Please note the final value in the chart below is calculated on a trailing twelve-month basis.
Image Source: Zacks Investment Research
Putting Everything Together
Oracle (ORCL - Free Report) recently impressed the market with its quarterly results, with shares melting higher following the print. The company reported several notable highlights, announcing a massive deal with Amazon’s (AMZN - Free Report) AWS that’s expected to bring positive tailwinds.
The valuation picture is a bit rich, but that’s reflective of investors’ big growth expectations following robust quarterly results in 2024. Shares are now trading near all-time highs thanks to the robust results, with more upside likely given its favorable position and record-breaking backlog.
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Oracle Shares Soar: Time to Buy?
Tech stocks have delivered remarkable returns in 2024, with investors regularly clamoring for exposure. One of those stocks in particular, Oracle (ORCL - Free Report) , recently delivered quarterly results that caused shares to melt higher post-earnings.
The company offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. Up more than 60% in 2024, the company’s quarterly results have regularly brought post-earnings fireworks, as shown below.
Image Source: Zacks Investment Research
Let’s take a closer look at the release and how the company currently stacks up.
Oracle Reports Record Backlog
Concerning headline figures, Oracle exceeded both consensus earnings and revenue expectations, with EPS growing 24% year-over-year alongside a 7% sales increase.
The company’s Cloud segment paved the way for a robust release, with Cloud services revenue climbing 21% and now reflecting the company’s largest business overall. Thanks to the robust performance within its Cloud segment, the company saw a growth acceleration in both operating income and EPS.
As shown below, the company’s top line stayed rather stagnant for some time before seeing an acceleration over recent years.
Image Source: Zacks Investment Research
Importantly, Oracle’s remaining performance obligation (RPO) melted 53% higher year-over-year to a record $99 billion, which forecasts strong sales growth throughout its current year (FY25).
ORCL to Benefit From Hyperscalers
The company also announced that it’s signed a MultiCloud agreement with Amazon’s (AMZN - Free Report) AWS, likely reflecting the biggest highlight of the release overall. AWS remains the cloud infrastructure market leader, with customers expected to receive access to the Oracle database when it goes live later in December.
It’s worth noting here that Amazon isn’t the only Hyperscaler (large cloud service provider) that Oracle is in business with, as it’s already inked MultiCloud agreements with both Microsoft Azure and Google Cloud as well. All these deals bode highly favorable for the company, with customers able to utilize its database technology within every Hyperscaler’s Cloud.
Are Shares Expensive?
The valuation picture for the stock is currently rich, with the current 25.3X forward 12-month earnings multiple sitting near the high end of the five-year range. The steeper multiple is reflective of investors’ growth expectations, with the current 2.3X PEG ratio also near the high end of the five-year range.
Shareholders Get Paid
The company also boasts a shareholder-friendly nature, currently carrying a sizable 14% five-year annualized dividend growth rate paired with a sustainable payout ratio sitting at 34% of its earnings. Please note the final value in the chart below is calculated on a trailing twelve-month basis.
Putting Everything Together
Oracle (ORCL - Free Report) recently impressed the market with its quarterly results, with shares melting higher following the print. The company reported several notable highlights, announcing a massive deal with Amazon’s (AMZN - Free Report) AWS that’s expected to bring positive tailwinds.
The valuation picture is a bit rich, but that’s reflective of investors’ big growth expectations following robust quarterly results in 2024. Shares are now trading near all-time highs thanks to the robust results, with more upside likely given its favorable position and record-breaking backlog.