Oracle Corporation (ORCL)

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Earnings Preview: Oracle Corp. (NYSE: ORCL)
By: 24/7 Wall St. | September 9, 2022

• No significant reports are due late Friday or before markets open on Monday. Here is a look at what to expect from two companies reporting results after markets close on Monday.

Oracle

Software and cloud-computing giant Oracle Corp. (NYSE: ORCL) has dropped about 16.6% from its share price over the past 12 months. Since reaching an all-time high in mid-December, the share price has declined by about 27%.

Oracle’s balance sheet carries $57.6 billion in net debt following the company’s merger with Cerner, about $20 billion more than 12 months ago. Free cash flow for the past 12 months is around $5 billion, a sharp drop from $13.75 billion 12 months ago. Oracle recently laid off an unspecified (but large) number of its 143,000 employees, temporarily pushing the share price higher.

Of 29 analysts covering the stock, nine have a Buy or Strong Buy rating and 18 have a Hold rating. At a recent price of around $74.70 a share, the upside potential based on a median price target of $82.00 is about 9.8%. At the high price target of $115.00, the upside potential is 53.9%.

Fiscal first-quarter revenue is forecast at $11.45 billion, which would be down 3.3% sequentially but up 17.7% year over year. Adjusted earnings per share (EPS) are pegged at $1.08, down 30.2% sequentially and up 4.9% year over year. For the full 2023 fiscal year ending in May, current estimates call for EPS of $5.25, up 7.2%, on sales of $49.79 billion, up 17.3%.

Oracle stock trades at 14.2 times expected 2023 EPS, 12.6 times estimated 2024 earnings of $5.90 and 11 times estimated 2025 earnings of $6.80 per share. The stock’s 52-week range is $63.76 to $106.34. The company pays an annual dividend of $1.28 (yield of 1.7%). Total shareholder return for the past year is negative 15.3%.

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