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As Tech Gets Hammered, This Stock Looks Attractive—Even in a Recession
By: Barron's | June 17, 2022
Amid a devilish brew of rising rates, high inflation, and recession fears, the tech sector offers few hiding places for investors.
The market is shunning the high-growth, profitless software stocks that drove the sector higher during the pandemic. Consumer-facing e-commerce and hardware stocks are sagging, plagued by weakening demand; social media plays are taking a beating as ad buyers retrench; and supply-chain issues are hitting chip stocks. Almost every tech stock is down for the year, with dozens off more than 50%.
In past columns, I’ve made the case for betting on cloud computing, and I think the story remains compelling. As recent earnings reports from Amazon.com (ticker: AMZN), Microsoft (MSFT), and Alphabet (GOOGL) made clear, demand for cloud-based computing services is both vast and expanding. The promise of the cloud—improved flexibility and reduced costs—is fundamentally changing the way every company handles computing.
In a research note this past week, Credit Suisse analyst Phil Winslow wrote that corporate spending on the public cloud should top on-premises infrastructure IT outlays by 2024. It’s cloud computing, not just software, that’s eating the world. Winslow argues that Wall Street is underestimating the growth potential for Microsoft Azure. I see Microsoft and Amazon as the best long-term bets on the cloud.
But I also see opportunity in another cloud play that’s still hiding in plain sight. In February 2021, I wrote a bullish cover story about Oracle (ORCL), making the case that the enterprise database and applications company had quietly evolved into an underappreciated cloud story.
The company was driving its customers to adopt cloud-based versions of its software, while also launching Oracle Cloud, a fledgling rival to the public cloud’s Big Three. Oracle’s transition to the cloud was gaining traction, but investors hadn’t caught on. As it turned out, Oracle was a great stock to own in 2021, rallying more than 70% by mid-December, as quarterly results showed steady progress on the cloud strategy.
And then two things happened that blew up the stock. At a macro level, the tech selling spree picked up steam. While the selloff started with pandemic darlings like Zoom Video Communications (ZM) and Peloton Interactive PTON +3.07% (PTON), it soon spread everywhere, and Oracle wasn’t immune. But the bigger issue was Oracle’s late December announcement of a $28 billion cash deal to buy Cerner, an electronic medical records company serving hospitals and healthcare systems.
Over time, Oracle has made many large acquisitions—PeopleSoft, Siebel, Sun Microsystems—but Cerner is its largest deal ever. Oracle is betting big on healthcare digitization. It’s also a wager that it can shift Cerner’s software to the Oracle Cloud, generating huge savings. While Oracle has said the deal will be an immediate boost to earnings, the transaction raises the worry of integration risk, requires Oracle to take on additional debt, and moderates what had been an extremely aggressive stock buyback plan.
Since peaking right before the Cerner deal was announced, Oracle stock has fallen 38%, shedding some $100 billion in market value.
Deutsche Bank analyst Brad Zelnick says the Cerner acquisition cast some doubt about Oracle’s shift to the cloud, the reason behind the stock’s 2021 rally. The deal offered ammunition to the skeptics who were already worried about Oracle’s cloud commitment.
But this past week, Oracle’s earnings provided fresh evidence that the transition is still under way.
For the fiscal fourth quarter ended May 31, Oracle reported revenue of $11.8 billion, up 10% adjusted for currency, in the company’s best growth quarter since 2011. The figure beat the company’s own guidance and Wall Street’s estimates.
Meanwhile, Oracle’s cloud business grew 22% in the quarter—and Oracle CEO Safra Catz told investors that cloud revenue growth should accelerate to 25% to 28% in the August quarter and 30% or more in fiscal 2023. (On Friday, TikTok announced that it will send all of its U.S. user traffic to the Oracle Cloud.)
Oracle shares rallied after the report, and they actually finished higher on the week, a rare success in an otherwise dismal week for stocks.
Zelnick, who maintains a Buy rating and $110 target price on Oracle shares—a potential 70% return—says Oracle’s guidance implies continued high-single-digit revenue growth for the overall business on a currency adjusted basis.
While Zelnick concedes that no company is immune from a deep recession, he thinks other dynamics will carry the day at Oracle in the months ahead, setting the stage for a rebound in the stock. “They are transforming their own business, they are taking out costs from Cerner,” and, he says, “inflation actually is good for Oracle.” There are inflation-index linked increases built into Oracle’s customer contracts, Zelnick explains. Meanwhile, switching costs are so high for Oracle software that customers show little resistance to price hikes.
The selloff in Oracle stock has made it cheap by most measures. At a recent $68, it trades at less than 13 times Zelnick’s forecast for profits of $5.36 a share for the May 2023 fiscal year and less than four times his post-Cerner revenue forecast of just under $50 billion. On both measures that’s less than half Microsoft’s valuation.
If Oracle’s cloud growth vision plays out, the stock should rebound, regardless of whether there’s a recession.
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Oracle (ORCL) PT Set at $82.00 by JPMorgan Chase & Co.
By: MarketBeat | June 16, 2022
• Oracle (NYSE:ORCL - Get Rating) has been given a $82.00 target price by equities research analysts at JPMorgan Chase & Co. in a research note issued on Thursday, Borsen Zeitung reports. JPMorgan Chase & Co.'s target price would suggest a potential upside of 17.65% from the company's previous close...
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TikTok US User Data Moved to Oracle Servers
By: Investing.com | June 17, 2022
Reuters confirmed Friday that TikTok has moved all of its US users' information onto Oracle (NYSE:ORCL) servers.
The company confirmed the data migration to Reuters, which may help ease data integrity concerns by US regulators.
The move comes almost two years after US authorities, under the Trump administration, told TikTok owner ByteDance to move US user data to the United States on concerns the Chinese government could use it to access sensitive information on US citizens.
At the time, it was reported that as well as user data, other core TikTok systems, including those that track how viral a video has become, and the algorithm that drives the 'For You' page recommendations will be operated from the US.
However, Reuters did not state whether other data features had been cloned and moved to the US.
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Oracle (ORCL) Price Target Raised to $80.00 at Jefferies Financial Group
By: MarketBeat | June 14, 2022
• Oracle (NYSE:ORCL - Get Rating) had its target price boosted by research analysts at Jefferies Financial Group from $75.00 to $80.00 in a report released on Tuesday, The Fly reports. Jefferies Financial Group's target price would indicate a potential upside of 15.46% from the company's previous close...
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Oracle Rallies After Dividend Hike
By: Vladimir Zernov | June 14, 2022
• The company raised the dividend by 19%.
Oracle Gains Ground After Strong Report
Shares of Oracle gained strong upside momentum after the company released its quarterly report. Oracle reported revenue of $11.84 billion and adjusted earnings of $1.54 per share, easily beating analyst estimates on both earnings and revenue.
The company noted that it had experienced a significant increase in demand in its infrastructure business. Oracle believes that this increase indicates that this business has entered a hyper-growth phase.
Oracle decided to increase the quarterly dividend from $0.27 per share to $0.32 per share, which served as an additional bullish catalyst for the stock. At current price levels, Oracle yields 1.8%.
What’s Next For Oracle Stock?
Analysts expect that Oracle will report earnings of $5.25 per share in the current year and $5.76 per share in the next year, so the stock is trading at 12 forward P/E. Analyst estimates have been mostly stable in recent months, while the stock has been under significant pressure since the start of this year.
While Oracle stock looks cheap at current levels, its near-term dynamics will depend on general market sentiment towards tech stocks. Traders are worried that the Fed will raise rates aggressively to fight inflation, which is bearish for tech companies.
It remains to be seen whether the company’s internal catalysts, like the strength of its infrastructure business, will be sufficient enough to provide support for the stock in case the general market moves towards new lows.
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my theory is it will continue to buy-out untill it loses $$$ big time
Oracle (ORCL) shares rise on better-than-expected earnings report
By: CNBC | June 13, 2022
• Oracle exceeded estimates on the top and bottom lines for its fiscal fourth quarter.
• CEO Safra Catz said in a statement that the company saw a “major increase in demand” for cloud infrastructure.
Oracle shares rose almost 9% in extended trading on Monday after the database software company issued fiscal fourth-quarter results that exceeded analysts’ estimates.
Here’s how the company did:
• Earnings: $1.54 per share, adjusted, vs. $1.37 as expected by analysts, according to Refinitiv.
• Revenue: $11.84 billion, vs. $11.66 billion as expected by analysts, according to Refinitiv.
Revenue increased 5% from a year earlier, driven by growth in the company’s cloud infrastructure business, which competes with Amazon Web Services and Microsoft Azure.
Oracle said that unit increased sales by 36%, lifting total cloud revenue by 19% to $2.9 billion. According to Synergy Research Group, Oracle didn’t crack the top five global providers of cloud infrastructure as of the end of last year. But the company has been touting its ability to not just pull legacy customers over to its cloud products but also to attract new clients.
CEO Safra Catz said in a statement that the company saw a “major increase in demand” for cloud infrastructure.
“We believe that this revenue growth spike indicates that our infrastructure business has now entered a hyper-growth phase,” Catz said.
Prior to the after-hours pop, Oracle shares were down 27% for the year, slightly outperforming the Nasdaq, which has tumbled 31%.
Oracle’s earnings beat is particularly important as investors turn their focus to companies that can generate profitability and cash during a downturn.
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Stock To Watch In The Coming Week: Oracle (NYSE:ORCL)
By: Investing.com | June 12, 2022
Inflation and interest rates will likely once again dominate the market trading agenda in the upcoming week after US government data last Friday showed there was no let-up in price pressures to the economy during the month of May.
US inflation accelerated to a fresh 40-year high last month, a sign that these price pressures are becoming entrenched in the economy, pushing the Federal Reserve to extend an aggressive series of interest-rate hikes.
The Fed is widely expected to raise the fed funds rate by a half point Wednesday and again next month, but this past Friday’s very hot consumer inflation report fueled speculation that policymakers may make a case for a bigger hike.
Stocks reacted negatively after the CPI release with the S&P 500 falling 5.1% for the week. Amid renewed concerns about inflation and the path of US monetary policy, below are three stocks we’re monitoring closely in the week ahead:
Oracle
Software and infrastructure giant Oracle (NYSE:ORCL) will release its fiscal 2022, fourth-quarter earnings report on Monday, June 13, after the market close. Analysts are projecting $1.37 a share profit on sales of $11.62 billion.
ORCL Weekly TTM
In March, the Austin, Texas-based Oracle gave an upbeat forecast for its cloud-computing business, helped by higher sales from its cloud division that could finish the fiscal year with the growth rate in the mid-20s. Total revenue in the past quarter was expected to gain as much as 5%.
Oracle has been trying to fuel growth in its cloud business and create a bigger imprint in the fast-growing market, which is led by Amazon, Microsoft (NASDAQ:MSFT) and Alphabet's (NASDAQ:GOOGL) Google. Cloud revenue rose 24% to $2.8 billion in the fiscal third quarter, which ended Feb. 28.
Oracle shares, which closed on Friday at $67.14, have slumped by 23% this year amid a widespread sell-off in tech stocks.
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Oracle (ORCL) Price Target Cut to $98.00
By: MarketBeat | June 9, 2022
• Oracle (NYSE:ORCL - Get Rating) had its price target decreased by analysts at Cowen from $107.00 to $98.00 in a research report issued to clients and investors on Thursday, Stock Target Advisor reports. The brokerage presently has an "outperform" rating on the enterprise software provider's stock. Cowen's price target indicates a potential upside of 38.93% from the company's current price...
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Earnings Preview: Oracle Corp. (NYSE: ORCL)
By: 24/7 Wall St. | June 10, 2022
• Here is a look at two companies scheduled to release quarterly results Monday afternoon or Tuesday morning.
Oracle
Software and cloud-computing giant Oracle Corp. (NYSE: ORCL) has dropped about 17% from its share price over the past 12 months. Since reaching an all-time high in mid-December, the share price has dropped by 32%. Oracle reports quarterly results after markets close Monday.
Oracle closed its $28.3 billion merger with electronic health records giant Cerner on Wednesday. Chairperson Larry Ellison said the company plans to build a unified national health records database “where the health records all American citizens’ health records not only exist at the hospital level but also are in a unified national health records database.”
Of 27 analysts covering the stock, seven have a Buy or Strong Buy rating and 18 have a Hold rating. At a share price of around $69.20, the upside potential based on a median price target of $88.00 is about 27.2%. At the high price target of $126, the upside potential is 82.1%.
Fiscal fourth-quarter revenue is forecast at $11.97 billion, up 11.0% sequentially and 3.9% higher year over year. Adjusted EPS are pegged at $1.38, up 21.9% sequentially and down 10.4% year over year. For full fiscal 2022 that ended in May, current estimates call for EPS of $4.75, up 1.7%, on sales of $42.27 billion, up 4.4%.
Oracle stock trades at 14.6 times expected 2022 EPS, 13.2 times estimated 2023 earnings of $5.24 and 12.0 times estimated 2024 earnings of $5.78 per share. The stock’s 52-week range is $66.72 to $106.34. The company pays an annual dividend of $1.28 (yield of 1.85%). Total shareholder return for the past year is negative 16.9%.
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Oracle Presents an Interesting Opportunity - Morgan Stanley
By: Investing.com | June 6, 2022
Morgan Stanley analyst Keith Weiss reiterated an Equal Weight rating and $88 price target on Oracle (NYSE:ORCL) Monday, stating that the shares present an interesting opportunity.
Asking the question of whether Oracle is a "safe(er) ship in stormy seas," the analyst wrote that increased confidence in the underlying drivers of a modest revenue acceleration in FY23, along with expectations for OM to sustain above pre-pandemic levels, make them believe the risk-reward at Oracle presents an "interesting opportunity on a relative basis."
"With shares outperforming thus far this year, the debate on the stock has shifted to whether there is still room left to run in the value trade at Oracle," wrote Weiss. "At reasonable valuations (short duration assets) are seen as a relatively safe harbor as investors navigate a period of rising interest rates and multiple compression across software."
"From that perspective, we'd argue that Oracle presents an interesting opportunity for better-than-expected EPS growth in a choppy marketplace," he added.
Weiss sees positive data points on the momentum of the core business at Oracle, resulting in the belief that the shares adequately discount the uncertainties.
Oracle is expected to report its fourth-quarter results on June 13, 2022.
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Oracle gains EU green light for $28.3 bln Cerner deal
By: Reuters | June 2, 2022
U.S. business software maker Oracle Corp (ORCL.N) has secured unconditional EU antitrust clearance for its $28.3 billion acquisition of U.S. healthcare IT company Cerner Corp (CERN.O), the EU competition enforcer said on Thursday.
The acquisition, Oracle's biggest ever, would give the company access to a trove of data and could increase the number of healthcare clients to its cloud platform. read more
The European Commission said it did not have any competition concerns about the deal as there are no overlaps between the companies and the merged company would not have the ability to shut out rivals.
Reuters reported exclusively on May 24 that Oracle would get the EU green light. read more
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Oracle (ORCL) Reaches New 52-Week Low at $70.13
By: ABMN | May 13, 2022
• Oracle Co. (NYSE:ORCL – Get Rating)’s share price reached a new 52-week low on Thursday . The stock traded as low as $70.13 and last traded at $70.26, with a volume of 26739 shares traded. The stock had previously closed at $71.03...
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Oracle Receives Consensus Recommendation of "Hold" from Brokerages
By: MarketBeat | April 29, 2022
• Oracle Co. (NYSE:ORCL - Get Rating) has earned a consensus recommendation of "Hold" from the twenty-nine analysts that are covering the firm, MarketBeat Ratings reports. Three investment analysts have rated the stock with a sell rating, twelve have issued a hold rating and five have issued a buy rating on the company. The average 1 year target price among brokerages that have issued a report on the stock in the last year is $92.64...
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Oracle Co. (ORCL) Sees Large Drop in Short Interest
By: ABMN | April 16, 2022
• Oracle Co. (NYSE:ORCL – Get Rating) was the target of a significant decline in short interest in March. As of March 31st, there was short interest totalling 12,990,000 shares, a decline of 45.1% from the March 15th total of 23,660,000 shares. Based on an average trading volume of 9,090,000 shares, the short-interest ratio is currently 1.4 days. Currently, 0.9% of the shares of the stock are short sold...
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Oracle Updates Q4 2022 Earnings Guidance
By: MarketBeat | April 8, 2022
• Oracle (NYSE:ORCL - Get Rating) updated its fourth quarter 2022 earnings guidance on Friday. The company provided earnings per share guidance of $1.400-$1.440 for the period, compared to the Thomson Reuters consensus earnings per share estimate of $1.380. The company issued revenue guidance of $11.56 billion-$11.79 billion, compared to the consensus revenue estimate of $11.76 billion...
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Oracle (ORCL) Lifted to "Neutral" at Exane BNP Paribas
By: MarketBeat | March 29, 2022
• Oracle (NYSE:ORCL - Get Rating) was upgraded by equities research analysts at Exane BNP Paribas from an "underperform" rating to a "neutral" rating in a research report issued to clients and investors on Tuesday, The Fly reports...
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Oracle (ORCL) Updates Q4 2022 Earnings Guidance
By: MarketBeat | March 25, 2022
• Oracle (NYSE:ORCL - Get Rating) issued an update on its fourth quarter 2022 earnings guidance on Friday morning. The company provided earnings per share guidance of $1.400-$1.440 for the period, compared to the Thomson Reuters consensus earnings per share estimate of $1.380. The company issued revenue guidance of $11.56 billion-$11.79 billion, compared to the consensus revenue estimate of $11.76 billion...
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Oracle Co. (ORCL) Expected to Post Quarterly Sales of $11.63 Billion
By: MarketBeat | March 26, 2022
• Wall Street brokerages predict that Oracle Co. (NYSE:ORCL - Get Rating) will post $11.63 billion in sales for the current quarter, Zacks Investment Research reports. Seven analysts have made estimates for Oracle's earnings, with estimates ranging from $11.32 billion to $11.74 billion. Oracle reported sales of $11.23 billion in the same quarter last year, which indicates a positive year over year growth rate of 3.6%. The firm is scheduled to announce its next quarterly earnings results on Monday, January 1st...
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Jefferies Financial Group Analysts Give Oracle (ORCL) a $80.00 Price Target
By: MarketBeat | March 15, 2022
• Oracle (NYSE:ORCL - Get Rating) received a $80.00 price target from Jefferies Financial Group in a research report issued on Tuesday, Borsen Zeitung reports. Jefferies Financial Group's target price indicates a potential upside of 3.80% from the company's current price...
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Oracle Price Target Cut to $83.00
By: MarketBeat | March 11, 2022
• Oracle (NYSE:ORCL - Get Rating) had its target price cut by research analysts at Stifel Nicolaus from $87.00 to $83.00 in a research report issued on Friday, The Fly reports. Stifel Nicolaus' target price would suggest a potential upside of 4.51% from the company's current price...
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Oracle (ORCL) Issues Q4 2022 Earnings Guidance
By: MarketBeat | March 11, 2022
• Oracle (NYSE:ORCL - Get Rating) updated its fourth quarter 2022 earnings guidance on Friday. The company provided EPS guidance of $1.400-$1.440 for the period, compared to the Thomson Reuters consensus EPS estimate of $1.380. The company issued revenue guidance of $11.56 billion-$11.79 billion, compared to the consensus revenue estimate of $11.76 billion...
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Oracle Stock Chart: Key Support Level Is Tested After Earnings Miss
By: TheStreet | March 11, 2022
• Oracle stock is testing a key support level after the software giant's earnings report. Here's where it must hold to avoid making new lows.
What a difference one quarter makes. After falling about 3% early in Friday's session, shares of Oracle (ORCL) are now up after the software major reported earnings.
The company reported in-line revenue and missed on profit forecasts. While the cloud outlook impressed, investors are having a hard time bidding up the stock.
It hasn’t been a very good run for Oracle. The stock was hitting new 52-week highs in December, but at last month’s low it was down about 34% from the highs.
Currently, the shares are still down about 30% from that mark and are encroaching on this month’s low of $73.11.
While some of the large- and megacap tech stocks — particularly those considered value stocks — have held up much better than their growth-stock counterparts, it still hasn't been an easy ride.
Let’s look at the chart to see what key levels stand out here.
Trading Oracle Stock
Daily chart of Oracle stock.
Chart courtesy of TrendSpider.com
When Oracle stock rallied in December, it finally cleared the $100 mark and rallied to the 161.8% extension up near $106.
Once that price target was satisfied, the Oracle could hold $100. Instead, the shares gapped below this mark just a week after the big upside rally.
The stock climbed back to $100 and was harshly rejected. Oracle stock fell in 10 straight sessions.
It’s been quite the skid since, with Oracle falling in seven of the past 10 weeks. Two of those weekly gains were less than 0.4%.
From here, I want to see whether Oracle can avoid breaking this month’s low and can continue to hold the 21-month moving average.
If it can do that and build above $75, it opens the door for a potential weekly-up rotation and a move back over the 10-day and 21-day moving averages.
Perhaps more important, the stock would avoid making new lows after earnings and get back above downtrend resistance (blue line).
In this scenario, it would put the 10-week, 10-month and 50-day moving averages in play, near $80 to $81.
On the downside, a break and close below the March low would put the February low on the table near $70.
A move and close below $70 could ultimately open the door to the 200-week and 50-month moving averages. While they are rising, they currently come into play near $61 to $63.
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Oracle (ORCL) Earnings Miss, Revenue Inline In Q3
By: Investing.com | March 10, 2022
Oracle (NYSE:ORCL) reported on Thursday third-quarter earnings that missed analysts' forecasts and revenue that was inline with expectations.
Oracle announced earnings per share of $1.13 on revenue of $10.51B. Analysts polled by Investing.com anticipated EPS of $1.18 on revenue of $10.51B.
The company's total cloud revenue was $2.8 billion, up 24%. Its overall revenue growth is being driven by its rapidly growing Cloud Infrastructure and Cloud Applications businesses.
Oracle shares are down 11% from the beginning of the year. They fell a further 6.06% in after-hours trade following the report.
"In Q3, Oracle delivered over 7% constant currency revenue growth—our highest quarterly organic revenue growth rate since we began our transition to the cloud," said Oracle CEO, Safra Catz. "This strong top line growth was coupled with a solid non-GAAP constant currency operating profit growth of 4%.
Oracle also declared a quarterly cash dividend of $0.32 per share.
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Earnings Previews: Oracle Corp. (NYSE: ORCL)
By: 24/7 Wall St. | March 9, 2022
• Here is a look at two tech companies set to report results after markets close on Thursday.
Oracle
Software and cloud-computing giant Oracle Corp. (NYSE: ORCL) has added about 5.7% to its share price over the past 12 months, including a drop of 27.3% since mid-December. The company reports quarterly results after markets close Thursday.
Last week, the company suspended all business operations in Russia. The company’s planned $28.3 billion acquisition of digital healthcare firm Cerner was announced in December and the deal is expected to close later this year. Data analytics firm Enterprise Technology Research reported that Oracle’s cloud platform grew faster than competitors AWS, Azure, and Google Cloud in three months between October and January.
Of 27 analysts covering the stock, just six have a Buy or Strong Buy rating and 18 rate the shares at Hold rating. At a share price of around $75.60, the upside potential based on a median price target of $101.50 is about 34.3%. At the high price target of $126, the upside potential is 66.7%.
Fiscal third-quarter revenue is forecast at $10.51 billion, up 1.5% sequentially and 4.2% year over year. Adjusted EPS are pegged at $1.18, down 2.6% sequentially but up 1.7% year over year. For full fiscal 2022 ending in May, current estimates call for EPS of $4.82, up less than 3.1%, on sales of $42.36 billion, up 4.6%.
Oracle stock trades at 15.7 times expected 2022 EPS, 14.4 times estimated 2023 earnings of $5.24 and 13.1 times estimated 2024 earnings of $5.75 per share. The stock’s 52-week range is $60.60 to $314.76. Oracle does not pay a dividend. Total shareholder return for the past year is negative 54.5%.
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Analysts Expect Oracle Co. (ORCL) Will Post Quarterly Sales of $10.51 Billion
By: MarketBeat | March 5, 2022
• Wall Street brokerages forecast that Oracle Co. (NYSE:ORCL - Get Rating) will announce $10.51 billion in sales for the current quarter, Zacks reports. Seven analysts have issued estimates for Oracle's earnings, with the highest sales estimate coming in at $10.55 billion and the lowest estimate coming in at $10.49 billion. Oracle reported sales of $10.09 billion during the same quarter last year, which would suggest a positive year over year growth rate of 4.2%. The business is scheduled to announce its next quarterly earnings results after the market closes on Thursday, March 10th...
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How Oracle (ORCL) Stock Could Partially Recoup Recent Losses
By: Schaeffer's Investment Research | February 16, 2022
• The 320-day moving average could help ORCL push higher
• There is plenty of room for optimism among the brokerage bunch
Oracle Corporation (NYSE:ORCL) is down 1.6% at $78.46 this afternoon. The equity has been testing a floor at the $78 level over the last couple of weeks, after pulling back from a Dec. 10, all-time high of $106.25. The cloud name still sports a 26.2% year-over-year lead, though, and is now flashing a historically bullish signal that may help it recoup some of its recent losses.
More specifically, Oracle stock's latest pullback has placed it within one standard deviation of its 320-day moving average, which has helped ORCL surge higher in the past. According to a study conducted by Schaeffer's Senior Quantitative Analyst Rocky White, the stock has seen six similar signals over the last three years. One month after each signal, the security was higher, averaging a 6.6% return in that period. From its current perch, a move of the same magnitude would put ORCL above the $83 mark.
There is plenty of room for optimism among the brokerage bunch. Of the 17 analysts in coverage, 12 call Oracle stock a tepid "hold," while the remaining five doled out "strong buy" ratings.
It is also worth noting the equity's Schaeffer's Volatility Scorecard (SVS) stands at a relatively high 81 out of 100. This means ORCL has exceeded option traders' volatility expectations during the past year.
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$1.17 EPS Expected for Oracle Co. (ORCL) This Quarter
By: MarketBeat | February 11, 2022
• Analysts expect that Oracle Co. (NYSE:ORCL) will announce $1.17 earnings per share for the current fiscal quarter, according to Zacks Investment Research. Seven analysts have made estimates for Oracle's earnings, with estimates ranging from $1.14 to $1.21. Oracle posted earnings per share of $1.16 in the same quarter last year, which would suggest a positive year-over-year growth rate of 0.9%. The business is expected to report its next earnings results on Wednesday, March 9th...
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Oracle (ORCL) Given New $110.00 Price Target at Deutsche Bank Aktiengesellschaft
By: MarketBeat | January 21, 2022
• Oracle (NYSE:ORCL) had its price objective cut by Deutsche Bank Aktiengesellschaft from $120.00 to $110.00 in a research note issued on Friday, The Fly reports. Deutsche Bank Aktiengesellschaft's price target would suggest a potential upside of 32.98% from the stock's current price...
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Oracle opens data centre to provide cloud services across Africa
By: Reuters | January 20, 2022
Oracle opened a data centre in South Africa on Wednesday to provide local cloud services across Africa for the first time, joining the likes of Microsoft and Amazon in setting up facilities in the southernmost country on the continent.
Africa will be the U.S. company's 37th "cloud region" - an area that allows customers to get faster access from a local data centre, in this case in Johannesburg.
Oracle is racing to open at least 44 cloud regions this year as it plans to catch up with cloud computing rivals such as Microsoft, Amazon and Google.
Though Oracle has no plans for more data centers in Africa this year, more could come next year as the company explores areas such as West Africa, Cherian Varghese, regional managing director for Middle East and Africa, told Reuters.
Increased demand for faster computing from African banks and telecom firms has attracted big cloud operators into the largely untapped market, with Microsoft the first to launch data centers in South Africa, followed by Amazon and Huawei.
Fast connectivity provided by a submarine communication cable and being Africa's most developed economy have made South Africa a key location for cloud operators, with over 50 data centres in the country, mostly near Cape Town and Johannesburg.
However, South Africa comes with infrastructure challenges, such as high power prices and frequent power cuts, meaning additional costs have to be set aside for back-up power.
Smaller cloud operators are also trying to grab a piece of the fast-expanding market for data localisation.
U.S.-based Digital Realty is buying a majority stake in a Johannesburg-based date centre operator for $3.5 billion, while Vantage Data Centres has also announced plans to invest up to a billion dollars to set up a data centre in South Africa.
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$10.50 Billion in Sales Expected for Oracle Co. (ORCL) This Quarter
By: MarketBeat | January 3, 2022
• Analysts predict that Oracle Co. (NYSE:ORCL) will post $10.50 billion in sales for the current quarter, Zacks reports. Eight analysts have issued estimates for Oracle's earnings, with estimates ranging from $10.46 billion to $10.55 billion. Oracle posted sales of $10.09 billion during the same quarter last year, which suggests a positive year over year growth rate of 4.1%. The company is expected to report its next earnings results on Wednesday, March 9th...
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Credit Suisse Group Analysts Give Oracle (ORCL) a $115.00 Price Target
By: MarketBeat | December 29, 2021
• Oracle (NYSE:ORCL) has been assigned a $115.00 price objective by equities research analysts at Credit Suisse Group in a report released on Wednesday, Borsen Zeitung reports. Credit Suisse Group's target price would suggest a potential upside of 30.37% from the company's previous close...
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Oracle (ORCL) Given a $94.00 Price Target by UBS Group Analysts
By: MarketBeat | December 23, 2021
• Oracle (NYSE:ORCL) received a $94.00 price objective from stock analysts at UBS Group in a research report issued on Thursday, Borsen Zeitung reports. UBS Group's price objective indicates a potential upside of 4.61% from the stock's previous close...
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Where Oracle (ORCL) Stock Could Be Headed Next
By: Schaeffer's Investment Research | December 23, 2021
• The software name is in talks to buy electronic medical records provider Cerner
• Year-to-date, ORCL sports an over 38% lead
The shares of Oracle Corporation (NYSE:ORCL) are inching lower today, last seen down 0.2% at $89.68. The software concern has taken a nosedive on the charts over the past couple of weeks, despite news it is in talks buy electronic medical records provider Cerner (CERN) for $30 billion. The $89 mark seems like it could contain this pullback from a Dec. 10, all-time high of $106.25, however. Plus, ORCL sports a 38.8% year-to-date lead.
The brokerage bunch remains skeptical of Oracle stock. Of the 18 analysts in question, 13 carry a tepid "hold," while the remaining five call it a "strong buy." Meanwhile, the 12-month consensus target price of $102.64 is a 14.3% premium to ORCL's current perch.
The options pits echo that pessimism. This is per the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.05, which sits higher than 89% of readings in its annual range. This means near-term put open interest outweighs call open interest by a wider-than-usual margin.
From a fundamental point of view, Oracle stock does not offer long-term security or growth potential. Aside from holding a relatively weak balance sheet, with $46.55 billion in cash and $87.01 billion in debt, its valuation also sits on the higher end. The security trades at a price-earnings ratio of 25.35, and a price-sales ratio of 7.44, which are both excessive given ORCL's growth rate in recent years.
What's more, Oracle's revenues are up just 4% since 2018, after it experienced back-to-back years of annual revenue declines in 2019 and 2020. ORCL's bottom-line growth is extremely inconsistent, despite an impressive net income increase of 168% since 2018.
Nonetheless, ORCL’s forward price-earnings ratio of 21.79 indicates that the company is expected to continue to see an increase in earnings in the coming year, perhaps making Oracle stock an opportunity for short-term traders.
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Oracle working to double client numbers in Latin America
By: Luis Jaime Acosta | December 21, 2021
BOGOTA (Reuters) - Enterprise software maker Oracle Corp (NYSE:ORCL) will look to double its clients in Latin America and increase profits in 2022, a company executive told Reuters, adding that hitting these goals will depend on cultivating the right talent.
Oracle has some 7,000 clients across Latin America. It plans to train 40,000 young workers in a free program of social inclusion as part of its expansion plans, the company's executive vice president for Latin America, Luiz Meisler, said during a virtual interview on Monday.
The training scheme will be available exclusively for people unable to access paid education.
"Our estimate is that we will have 40,000 certified students ready to work in the market, which is growing a lot," Meisler said. He added that the numbers could be much higher amid great market demand.
"I have much more market than my current capacity for delivery; my limit is set by how many people I can train, so I would project growth of at least double," he said.
Under the Oracle Next Education (ONE) program, the company hopes to create opportunities and train future professionals who face challenges in accessing education and employment across Latin America.
There are around 23 million people between the ages of 15 and 24 across Latin America who are neither working nor studying, according to the World Bank.
Oracle is growing across Latin America as part of a process of expanding its cloud coverage and supporting strong client demand, Meisler said.
During 2022 the company, which serves 430,000 customers in 175 countries, will establish 14 new cloud regions across five continents. The expansion will include increasing its centers in Latin America to eight, which will be based in Brazil, Mexico, Chile and Colombia.
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Oracle (ORCL) Keeps Seeing Big Money
By: Lucas Downey | December 20, 2021
• Oracle Corporation (ORCL) stock has skied in 2021, gaining +49.4%.
And the corporate technology giant could rise even more due to an announced acquisition of health data firm Cerner. But another likely reason is Big Money lifting the stock.
So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.
Smart money managers are always looking for the next hot stock. And Oracle has many fundamental qualities that are attractive.
This sets up well for the stock going forward. But how the shares have been trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares all year.
You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.
That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the Big Money signals ORCL has made the last year.
The last few weeks have seen Big Money activity, too. Each green bar signals big trading volumes as the stock ramped in price:
Source: www.mapsignals.com
In 2021, the stock has attracted 22 Big Money buy signals. Generally speaking, recent green bars could mean more upside is ahead.
Now, let’s check out technical action grabbing my attention:
• 1-month outperformance vs. iShares Expanded Tech-Software Sector ETF (+13.9% vs. IGV)
Outperformance is important for leading stocks.
Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Oracle has been growing nicely. Take a look:
• 1-year earnings growth rate (+9.7%)
• 3-year earnings growth rate (+93.1%)
Source: FactSet
Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.
In fact, ORCL has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock has buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.
ORCL has a lot of qualities that are attracting Big Money. And since 2015, it’s made this list 9 times, with its first appearance on 7/9/2019… and gaining 62.11% since. The blue bars below show the times that Oracle was a top pick since 2015:
Source: www.mapsignals.com
It’s been a top stock in the technology sector according to the MAPsignals process. I wouldn’t be surprised if ORCL makes additional appearances in the years to come. Let’s tie this all together.
The Bottom Line
The Oracle rally could have further to go. Big Money buying in the shares is signaling to take notice. Shares could be positioned for further upside. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a growth-oriented portfolio.
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Oracle’s Rally Takes a Short Pause. There’s Still More to Come
By: Barron's | December 17, 2021
Oracle shares have had a fantastic run in 2021. The stock is up 58% since Barron’s highlighted the enterprise software company’s impressive cloud progress in a February cover story.
Oracle (ticker: ORCL) has seen increased adoption of cloud-based versions of its database and application software, while showing strong growth for Oracle Cloud, an emerging rival to Amazon Web Services and Microsoft Azure.
But there’s a new wrinkle in the Oracle story. Late Thursday, The Wall Street Journal reported that Oracle is holding talks for a $30 billion acquisition of electronic medical records company Cerner (CERN).
Oracle shares slumped 6.4% on the news to $96.62, with investors likely concerned about how Oracle would finance the deal and how it would affect the company’s cloud push and stock buybacks.
It’s likely to be just a brief interruption for Oracle’s rally. The cloud growth is a multiyear opportunity.
Until the Cerner news, Oracle stock was basking in earnings glory. Earlier this month, Oracle said revenue for its fiscal second-quarter ended Nov. 30 was up 6% from the figure a year ago, well ahead of the company’s guidance.
Oracle CEO Safra Catz noted that combined cloud-based applications and database software revenue had risen 22% in the period, with growth likely accelerating in coming quarters. The stock rallied 15% on the news, to a record close.
Oracle has continued to support its stock with an aggressive repurchase program. The company bought back $7 billion worth in the latest quarter alone and has repurchased close to half of its shares over the past decade. The buybacks could be derailed by a deal for Cerner.
It’s worth noting that Oracle has been thinking about buying Cerner for a long time. Cerner’s name was on an internal list of nine potential Oracle M&A targets that surfaced in 2004. (Every other company on that list has now been acquired by Oracle, SAP , or someone else.)
Neither Oracle nor Cerner responded to requests for comment, but Oracle founder and Chairman Larry Ellison talked up the company’s interest in healthcare on the recent earnings call.
A Cerner acquisition would be the largest in Oracle’s long history of deal-making, which includes $9.3 billion for NetSuite in 2016, $7.4 billion for Sun Microsystems in 2010, $8.5 billion for BEA Systems in 2008, $5.9 billion for Siebel Systems in 2006, and $10.3 billion for PeopleSoft in 2005.
At $30 billion, Cerner would be priced at about five times Wall Street’s 2022 sales estimate of $6.1 billion. Stifel analyst Brad Reback points out in a research note that Cerner has a gross margin in the low 80% range, but operating margins of just 20%, “leaving a significant amount of operational efficiency to capture.”
It’s yet another opportunity for Larry Ellison and Safra Catz.
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Oracle is reportedly in talks to buy Cerner in a multi-billion dollar deal
By: Schaeffer's Investment Research | December 17, 2021
• Cerner Stock Hits Record High Amid Buyout Rumors
• Calls have been all the rage of late
The shares of electronic medical records provider Cerner Corporation (NASDAQ:CERN) are up 11.9% to trade at $88.93 this morning, after earlier surging to a new all-time high of $92.34. This bull gap came after the Wall Street Journal reported that Oracle (ORCL) is in talks to buy the company for potentially $30 billion.
The security was pacing for its best day since April 2008 earlier today, while also eyeing its fifth-straight win. CERN is also looking to close at its highest level o record, and has added 25.9% quarter-to-date.
There has been a preference for bullish bets over in the options pits. Over at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 17.36 calls have been bought for every put during the past two weeks.
Today's options pits lean heavily bearish, however. So far, 12,000 puts have crossed the tape, or 78 times the intraday average. Most popular is the January 2022 85 put, where new positions are being opened.
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Oracle's (ORCL) Growing Cloud Region Footprint to Aid Prospects
By: Zacks Equity Research | December 16, 2021
Oracle (ORCL) recently unveiled one cloud region each in Italy and the Nordics as part of its strategy to expand its global cloud region footprint to 44 by 2022. With the opening of the Oracle Cloud Milan Region, Oracle now has 36 cloud regions globally. Prior to that, the company opened the Stockholm cloud region in the Nordics.
Milan and Stockholm Cloud regions are expected to strengthen the tech giant’s reach within the European Union. Oracle already has cloud regions in Marseille, Frankfurt, Amsterdam, U.K. and Switzerland.
Oracle further noted that the latest cloud regions would aid business enterprises across Italy and Nordics to accelerate digital transformation while conforming to regulatory-compliance requirements and adequately meeting the data residency needs.
The cloud regions will offer business enterprises various cloud services like Oracle Container Engine for Kubernetes, Oracle Autonomous Database, Oracle Cloud Applications services, and Oracle Cloud VMware solution.
The company is planning to open a second cloud region in France and a first cloud region in Spain, going ahead.
Oracle Corporation Price and Consensus
High Availability of Cloud Regions to Boost Cloud Business
Oracle is endeavouring to capture a large share of the global cloud market to boost the top line. The company’s infrastructure-as-a-service (IaaS), software-as-a-service (SaaS) and platform-as-a-service (PaaS) products are likely to gain strong traction over the next few years as enterprises rapidly migrate to the cloud environment.
For second-quarter fiscal 2022, management noted that the company’s IaaS and SaaS business increased 22% to $2.7 billion, respectively. Management stated that the company’s total cloud business revenues on annualized basis totaled $10.7 billion, while the cloud bookings growth rate was faster than the cloud revenue growth rate.
Higher availability of Oracle cloud regions globally is expected to fortify its competitive position in the cloud computing domain. In October 2021, Oracle announced that it would open 14 new cloud regions across Europe, the Middle East, Asia Pacific and Latin America to support its cloud services platform.
In November 2021, Oracle unveiled its first cloud region in France — Oracle Cloud Marseille Region. Following that, the company unveiled Oracle Cloud Singapore Region and launched its second cloud region in the United Arab Emirates — Cloud Abu Dhabi Region.
At present, Oracle carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Competitive Landscape
Oracle needs to watch for intense competition in the cloud space. The cloud space is dominated by the likes of Amazon’s (AMZN) Amazon Web Services ("AWS") Microsoft’s (MSFT) Azure platform and Alphabet’s (GOOGL) Google cloud.
Per a Statista report, Amazon accounted for 32% of the global cloud infrastructure services market, followed by Microsoft (21%) and Alphabet’s Google Cloud (8%) in third-quarter 2021.
In the last reported quarter, Amazon’s AWS revenues (15% of total company sales) rose 39% year over year to $16.1 billion. Expanding AWS services portfolio is helping Amazon to maintain its dominance in the cloud domain by gaining more customers.
Amazon recently announced the opening of an AWS region in Jakarta, Indonesia. The company now has 84 AWS Availability Zones spread across 26 worldwide regions. Amazon is looking to unveil additional 24 AWS Availability Zones and another eight AWS Regions in New Zealand, Australia, Canada, India, Israel, Spain, Switzerland and the United Arab Emirates.
Microsoft’s performance is benefitting from strength in the Azure cloud platform amid the accelerated digital transformation taking place globally. Microsoft reported a 50% year-over-year (up 48% at constant currency) increase in Azure and other cloud services’ revenues in first-quarter fiscal 2022.
Azure’s increased availability in more than 60 announced regions globally is expected to have strengthened Microsoft’s competitive position in the cloud computing market.
In third-quarter 2021, Alphabet recorded a 44.9% year-over-year surge in Google Cloud revenues to $4.9 billion, which contributed 7.7% to quarterly revenues.
Google Cloud at present has 29 regions with 88 availability zones available across 200 countries and territories. The company is planning to open more regions, including Berlin (Germany), Doha (Qatar), Madrid (Spain), Paris (France), Milan (Italy), Dallas (United States of America), and Tel Aviv (Israel).
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JPMorgan Chase & Co. Reiterates "$110.00" Price Target for Oracle (ORCL)
By: MarketBeat | December 10, 2021
• Oracle (NYSE:ORCL) has been assigned a $110.00 price target by equities researchers at JPMorgan Chase & Co. in a report released on Friday, Borsen Zeitung reports. JPMorgan Chase & Co.'s price target suggests a potential upside of 6.92% from the stock's current price...
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Why Oracle (ORCL) Stock Can Rally Another 10% Above Today’s Record High
By: TheStreet | December 10, 2021
• Oracle stock is ripping to new all-time highs on strong earnings. Here's why the charts point to more potential upside.
The stock market is choppy on Friday following an in-line inflation report. However, there’s no doubt about where Oracle (ORCL) is going.
Shares are erupting higher on the day, up 15% after the company reported better-than-expected earnings on Thursday evening.
The move was enough to send Oracle stock to new record highs.
It’s not alone, either.
Broadcom (AVGO) is also hitting record highs on the day after it reported strong quarterly results too.
Not many look at Oracle stock for 10% or higher moves in a single day. But that’s exactly what we’re getting as strength in its cloud division drives the upside beats.
It's got momentum and now I’m looking at Oracle to see if it can deliver another 10% move to the upside.
Trading Oracle Stock
Daily chart of Oracle stock.
Chart courtesy of TrendSpider.com
Shares had peaked at $98.95 in mid-October, frustratingly short of the $100 mark.
It pulled back with the rest of the market earlier this month, with Oracle stock finding its footing around $88.
That is the range we are using now — $87.72 to $98.95 — to measure the potential upside extensions.
The first extension is near $106 and Oracle temporarily cleared that mark today. If it can continue higher, the 261.8% extension could eventually be on the table, up near $117.
I don’t expect the stock to hit this level in the next few days. However, if it can continue higher, this is a reasonable upside level for intermediate-term traders to target.
On the downside, buyers stepped in near the $100 mark on Friday, which is a bullish sign.
As long as the stock can maintain above the $99 to $100 area, the setup remains bullish in my view.
A close below these marks could have the 10-day and 50-day moving averages in play in the short term.
If we don’t have any meaningful dip in Oracle in the short term, look for the 10-day moving average to catch up to the stock price and act as support on the dips.
With today’s rally to new highs — particularly in the face of some market-wide indecision — look for Oracle to become a buy-on-dip candidate.
For now, over $99 to $100 is the key for bulls.
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