ORCL

Oracle Corp.

TMT


Presented:03/13/2024
Price:$125.52
Cap:$345.04B
Current Price:$174.09
Cap:$482.41B

Presented

Date03/13/2024
Price$125.52
Market Cap$345.04B
Ent Value$393.46B
P/E Ratio33.17x
Book Value$2.05
Div Yield1.27%
Shares O/S2,748.92M
Ave Daily Vol9,385,906
Short Int0.90%

Current

Price$174.09
Market Cap$482.41B
Oracle Corp. engages in the provision of products and services that address aspects of corporate information technology environments, including applications and infrastructure technologies. It operates through the following business segments: Cloud and License, Hardware, and Services. The Cloud and License segment markets, sells, and delivers enterprise applications and infrastructure technologies through cloud and on-premise deployment models including cloud services and license support offerings. The Hardware segment provides infrastructure technologies including Oracle Engineered Systems, servers, storage, industry-specific hardware, operating systems, virtualization, management, and other hardware-related software. The Services segment offers consulting, advanced support, and education services. The company was founded by Lawrence Joseph Ellison, Robert Nimrod Miner, and Edward A. Oates on June 16, 1977 and is headquartered in Austin, TX.

Publicly traded companies mentioned herein: Microsoft Corp (MSFT), Nomura Research Institute Ltd (4307 JP), NVIDIA Corp (NVDA), Oracle Corp (ORCL)

Highlights

The presenter is long shares of Oracle Corp (ORCL), believing there is significant upside despite trading up 11% following the company’s strong earnings results. From a top-down perspective, he is bullish on cloud growth, not only from the secular AI growth but also because of accelerated cloud transitions coinciding with a cyclical recovery. He views ORCL as an attractive play on this theme given the company’s positioning and recent evidence that trends are improving. Modeling revenue growth slightly ahead of consensus in the coming years (~11% vs. consensus ~9%), he reaches EPS of $7 in 2024 and $8 in 2025. At $125 per share, the stock currently trades at ~16x his 2025 EPS, whereas a low-20x valuation seems more appropriate if his outlook is correct. This leads to his $165 price target, which he would expect to be realized gradually over the coming quarters based on strong earnings results, slight sentiment improvement, and positive forecast revisions.

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