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Oracle (ORCL) Gains But Lags Market: What You Should Know

Zacks Equity Research

Oracle (ORCL) closed the most recent trading day at $52.13, moving +1.07% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.1%. Meanwhile, the Dow gained 1.05%, and the Nasdaq, a tech-heavy index, added 1.32%.

Prior to today's trading, shares of the software maker had lost 11.51% over the past month. This has lagged the Computer and Technology sector's loss of 5.47% and the S&P 500's loss of 5.05% in that time.

Wall Street will be looking for positivity from ORCL as it approaches its next earnings report date. In that report, analysts expect ORCL to post earnings of $0.81 per share. This would mark year-over-year growth of 14.08%. Meanwhile, our latest consensus estimate is calling for revenue of $9.29 billion, up 0.96% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.90 per share and revenue of $40.43 billion. These totals would mark changes of +10.8% and +2.29%, respectively, from last 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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.01% lower. ORCL is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, ORCL is currently trading at a Forward P/E ratio of 13.22. This represents a discount compared to its industry's average Forward P/E of 30.06.

Also, we should mention that ORCL has a PEG ratio of 1.35. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Computer - Software industry currently had an average PEG ratio of 1.95 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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