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Oracle (ORCL) Gains But Lags Market: What You Should Know

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Oracle (ORCL - Free Report) closed the most recent trading day at $115.79, moving +0.23% from the previous trading session. The stock trailed the S&P 500, which registered a daily gain of 1.07%. At the same time, the Dow added 0.35%, and the tech-heavy Nasdaq gained 1.74%.

Prior to today's trading, shares of the software maker had gained 12.61% over the past month. This has outpaced the Computer and Technology sector's gain of 4.83% and the S&P 500's gain of 2.93% in that time.

The investment community will be closely monitoring the performance of Oracle in its forthcoming earnings report. In that report, analysts expect Oracle to post earnings of $1.37 per share. This would mark year-over-year growth of 12.3%. Meanwhile, our latest consensus estimate is calling for revenue of $13.27 billion, up 7.07% from the prior-year quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $5.53 per share and a revenue of $53.33 billion, indicating changes of +8.01% and +6.75%, respectively, from the former year.

Investors should also note any recent changes to analyst estimates for Oracle. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. As of now, Oracle holds a Zacks Rank of #3 (Hold).

In terms of valuation, Oracle is presently being traded at a Forward P/E ratio of 20.88. This expresses a discount compared to the average Forward P/E of 32.33 of its industry.

Investors should also note that ORCL has a PEG ratio of 1.78 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Computer - Software industry had an average PEG ratio of 2.37 as trading concluded yesterday.

The Computer - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 68, placing it within the top 27% of over 250 industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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