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

Zacks Equity Research

In the latest trading session, Oracle (ORCL) closed at $55.70, marking a +0.05% move from the previous day. The stock lagged the S&P 500's daily gain of 0.07%. At the same time, the Dow 0%, and the tech-heavy Nasdaq lost 0.29%.

Heading into today, shares of the software maker had gained 3% over the past month, lagging the Computer and Technology sector's gain of 5.79% and the S&P 500's gain of 4.3% in that time.

Investors will be hoping for strength from ORCL as it approaches its next earnings release. In that report, analysts expect ORCL to post earnings of $0.88 per share. This would mark year-over-year growth of 10%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.63 billion, up 0.69% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.89 per share and revenue of $40.12 billion. These totals would mark changes of +10.51% and +1.51%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for ORCL. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. The Zacks Consensus EPS estimate has moved 0.03% lower within the past month. ORCL is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, ORCL currently has a Forward P/E ratio of 14.31. Its industry sports an average Forward P/E of 30.68, so we one might conclude that ORCL is trading at a discount comparatively.

Also, we should mention that ORCL has a PEG ratio of 1.47. 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 2.25 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 30, which puts it in the top 12% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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