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Oracle (ORCL) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

In the latest trading session, Oracle (ORCL) closed at $54.49, marking a -0.66% move from the previous day. This change lagged the S&P 500's 0.3% loss on the day. Elsewhere, the Dow lost 0.52%, while the tech-heavy Nasdaq lost 0.14%.

Coming into today, shares of the software maker had gained 3.2% in the past month. In that same time, the Computer and Technology sector gained 3.75%, while the S&P 500 gained 2.46%.

ORCL will be looking to display strength as it nears its next earnings release. On that day, ORCL is projected to report earnings of $0.88 per share, which would represent year-over-year growth of 10%. Our most recent consensus estimate is calling for quarterly revenue of $9.63 billion, up 0.69% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.89 per share and revenue of $40.12 billion, which would represent changes of +10.51% and +1.51%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for ORCL. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.04% lower. ORCL is currently a Zacks Rank #3 (Hold).

Digging into valuation, ORCL currently has a Forward P/E ratio of 14.1. For comparison, its industry has an average Forward P/E of 29.48, which means ORCL is trading at a discount to the group.

Also, we should mention that ORCL has a PEG ratio of 1.45. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ORCL's industry had an average PEG ratio of 2.22 as of yesterday's close.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 80, which puts it in the top 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ORCL in the coming trading sessions, be sure to utilize Zacks.com.


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