Oracle’s (ORCL), stock, has quietly done well over the last decades. Larry Ellison is now the 4th richest person in the world with an $186 billion fortune. The stock has increased in both the past two months, and it is now nearing its record high.
Oracle’s shares soared over 346% during the past decade. They outperformed other technology giants like Cisco, International Business Machines and IBM. This year, they have increased by 64.5%.
What does Oracle do and how can it help you?
Oracle does not have a big name in the industry because its products are not available to individual consumers. Oracle is a leading player in the Business-to-Business industry. It offers services to both large and small companies.
Oracle provides many different solutions for global businesses. It offers an Enterprise Resource Planning solution, which simplifies internal processes and allows companies to make better decisions. SAP is its biggest competitor.
Oracle offers Enterprise Performance Management, which includes services such as financial performance analysis or closing solutions. Other services include those that help with supply chain management and manufacturing, managing human resources and sales, as well as marketing.
It has acquired other companies to expand into new industries in the last few years. NetSuite is a cloud-based solution that offers a number of top SMB solutions, including ERP, HR, and Customer Relations. The $26 billion Cerner purchase was also used to get into the healthcare sector.
Oracle, which is best known for database solutions, has also expanded to become the largest software company in the world. Oracle has quietly become one of the leading companies in artificial intelligence industries.
Oracle has seen its business grow substantially over the last few years. This is partly due to acquisitions. The company’s revenue has increased from $39 Billion in 2019 to $52.9 Billion in the past financial year.
However, the annual profit has not increased that much. Its profits remained at around $10 billion during that time.
Oracle bull run: Can the rally continue?
Oracle is doing very well
Oracle did very well in the most recent financial reports. Cloud solutions helped Oracle’s revenue to rise by 7%, reaching $13.3 billion. Cloud revenue grew by 21%, to $5.6 Billion, whereas infrastructure, cloud apps, ERP and NetSuite all grew in the single digits.
It is working hard to increase its share of the market in data centers. Larry Ellison is the company’s Chief Technology Officer. He noted that 162 cloud-based data centers were in use and more are under construction. The center’s largest is an 800-megawatt facility that has acres of NVIDIA clusters to train AI models.
Oracle analysts believe the company’s success will continue, but at a more moderate pace.
It is estimated that the revenue of its current quarter will average $14 billion. It is estimated that its annual revenue will grow about 20%, to reach $58 billion. It is remarkable that a business in operation since 1977 has experienced a 20% growth per year.
Salesforce, an SAAS founded in 1999, is forecast to grow 8.60% by the end of this year. Microsoft is also expected to grow at a rate of 13.8% per year, and Amazon by 10.5%.
Oracle has been overvalued in recent years, and this is a cause for concern. Oracle’s trailing P/E is 44.7, which is higher than the average five-year ratio of 26. The company also boasts a P/E forward ratio of 37 which is higher than the average for five years of 26. Oracle has also a higher price-to book ratio (44%) than the median industry value of 3.
Analysts have therefore a modest estimate of Oracle. The average target price is $181 which is a few cents above its current value of $173.
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Oracle Stock Price Analysis
ORCL Chart by TradingView
Weekly chart of the ORCL shares shows a bullish trend in recent years. It has fallen in recent weeks.
Oracle is still about 30% higher than its 50-day MA and 47% above the 100-day MA.
Both the Relative Strength Index and Percentage Price Oscillator have pointed up.
Oracle’s shares are likely to continue rising in value over the next few years. In the short-term, it is possible that the stock will retreat briefly, possibly to $150 and resume its bullish trend. The retreat could occur before its December 9 earnings.
The post Oracle Stock Price Forecast: Brace for a Brief Retreat may change as new information becomes available.
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