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Oracle Corp.

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Oracle is in the middle of a business transition from on-premise licensing to cloud-based business model, which will be accretive to long term growth. However, it is a drag on the financials at present. Adding to that, Oracle seems to have hit a bad patch as far as litigation is concerned. Not surprisingly then, Oracle has underperformed the broader market in the last one-year. However, estimates have been stable lately ahead of the company’s Q3 earnings release.  Also, the company has mixed record of earnings surprises in recent quarters. Nevertheless, the ongoing momentum at SaaS and PaaS provides significant growth opportunities. The introduction of Generation2 IaaS data centers are expected to improve Oracle’s competitive prowess against Amazon Web Services and will drive market share going ahead. Moreover, the company’s decision to fine commercial users of Java SE augurs well for top line growth in the future.


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