Oracle Corporation (ORCL), headquartered in Austin, Texas, offers products and services that address enterprise information technology (IT) environments. Valued at $337.82 billion by market cap, the company provides cloud solutions and services that can be used to build and manage various cloud deployment models. Its businesses included cloud and license, hardware, and services. Its products and services include enterprise applications and infrastructure offerings delivered worldwide through various flexible and interoperable IT deployment models.
Shares of this software giant have underperformed the broader market over the past year. ORCL has gained 18.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 28.9%. However, in 2024, ORCL stock is up 17.3%, surpassing SPX’s 11.2% rise on a YTD basis.
Narrowing the focus, ORCL’s gains over the past 52 weeks are easily overshadowed by the North American Tech-Software iShares ETF (IGV). The exchange-traded fund has gained about 34.4% over the past year. However, the stock’s gains on a YTD basis outshine the ETF’s 2.2% returns over the same time frame.
On May 14, ORCL shares closed up more than 3% after The Information reported that Elon Musk’s artificial intelligence (AI) startup xAI was close to spending $10 billion to rent cloud servers from ORCL.
On March 11, ORCL shares rose 14% after the company reported strong Q3 results and provided upbeat guidance for the current quarter. The company’s adjusted EPS of $1.41 was higher than the consensus estimate of $1.38. Its revenue came in at $13.28 billion, compared to analyst estimates of $13.30 billion. For Q4, ORCL expects earnings of between $1.62 and $1.66. It also expects revenue growth of 4% to 6%.
For the current fiscal year, ending in May 2025, analysts expect ORCL’s EPS to grow 12.2% to $4.98 on a diluted basis. The company’s earnings surprise history is impressive. It beat or matched the consensus estimate in each of the last four quarters.
Among the 29 analysts covering ORCL stock, the consensus rating is a “Moderate Buy.” That’s based on 17 “Strong Buy” ratings and 12 “Holds.”
This configuration is much more bullish than three months ago, with 14 suggesting a “Strong Buy.”
Recently, KeyBanc initiated coverage of ORCL stock with an “Overweight” rating and set a price target of $150, implying a potential upside of 22% from current levels.
The mean price target of $136.39 represents an 11% premium to ORCL’s current price levels. The Street-high price target of $160 suggests an upside potential of 30.2%.
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