Shares of Oracle (ORCL - Free Report) have moved mostly sideways for over a year as the historic tech powerhouse tries to steer toward growth industries, specifically cloud computing. So, let’s see what investors should expect from Oracle’s upcoming quarterly earnings results and take a look at its business as a whole.
Oracle saw its revenue grow just 1% last quarter to touch $9.19 billion. However, its largest segment, cloud services and license support, popped 3% to $6.61 billion. Going forward, the company’s executives understand that Oracle must become a cloud powerhouse since that is simply the way the world is headed. “At some point, I expect all customers will make the transition to cloud, it’s just too compelling not to,” Oracle CEO Mark Hurd recently told CIO Journal.
Oracle currently lags behind Amazon (AMZN - Free Report) , Microsoft (MSFT - Free Report) , IBM (IBM - Free Report) , and Google (GOOGL - Free Report) in terms of total cloud market share, according to Synergy Research Group. Yet, Oracle sees some of its future in cloud-based software as a service, or SaaS, which could see it compete against the likes of Salesforce (CRM - Free Report) and others.
Moving on, we can see that shares of ORCL have underperformed its broader industry in recent years. Plus, shares of Oracle slipped nearly 5% as part of a larger selloff in morning trading Thursday to hover around $46.39 per share, which marked a roughly 13% downturn from their 52-week high.
We can also see that Oracle stock is currently trading at 15.3X forward 12-month Zacks Consensus EPS estimates, which represents a massive discount compared to its industry’s 24.9X average and the S&P 500’s 16.2X.
Plus, ORCL has also traded as high as 18.9X over the last year, with a one-year median of 15.3X. If we jump back over the past decade, we can see that Oracle’s valuation picture is not that stretched and that it has almost always traded at a discount against its industry.
Outlook & Earnings Trends
Looking ahead, our current Zacks Consensus Estimate calls for Oracle’s quarterly revenues to dip 0.99% to reach $9.53 billion. Meanwhile, Oracle’s adjusted quarterly earnings are projected to jump 11.43% to $0.78 per share. However, it is worth noting that the company’s earnings estimate revisions have trended in the wrong direction recently.
Oracle is currently a Zacks Rank #4 (Sell) based, for the most part, on these negative earnings revisions. Oracle is currently expected to release its quarterly financial results on Thursday, December 13, based on our projections. But Oracle’s report date could change since the firm has not made an official announcement yet.
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