As you might know, Oracle Corporation (NYSE:ORCL) recently reported its quarterly numbers. It was a credible result overall, with revenues of US$9.6b and earnings per share of US$0.69 both in line with analyst estimates, showing that Oracle is executing in line with expectations. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest forecasts to see whether analysts have changed their mind on Oracle after the latest results.
Taking into account the latest results, Oracle's 29 analysts currently expect revenues in 2020 to be US$40.0b, approximately in line with the last 12 months. Earnings per share are expected to dip 5.0% to US$3.08 in the same period. In the lead-up to this report, analysts had been modelling revenues of US$40.1b and earnings per share (EPS) of US$3.08 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$56.38, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Oracle, with the most bullish analyst valuing it at US$68.00 and the most bearish at US$35.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. Next year brings more of the same, according to analysts, with revenue forecast to grow 1.0%, in line with its 1.0% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 12% per year. So it's pretty clear that Oracle is expected to grow slower than similar companies in the same market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. The consensus price target held steady at US$56.38, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Oracle analysts - going out to 2024, and you can see them free on our platform here.
You can also see whether Oracle is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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