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Oracle (ORCL) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, Oracle (ORCL) closed at $54.17, marking a -0.17% move from the previous day. This move lagged the S&P 500's daily gain of 0.41%. At the same time, the Dow added 0.57%, and the tech-heavy Nasdaq gained 0.7%.

Coming into today, shares of the software maker had gained 0.56% in the past month. In that same time, the Computer and Technology sector gained 2.38%, while the S&P 500 gained 2.04%.

Wall Street will be looking for positivity from ORCL as it approaches its next earnings report date. The company is expected to report EPS of $0.88, up 10% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue 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.

Investors should also note any recent changes to analyst estimates for ORCL. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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, 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 holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, ORCL is currently trading at a Forward P/E ratio of 13.95. For comparison, its industry has an average Forward P/E of 28.73, which means ORCL is trading at a discount to the group.

Also, we should mention that ORCL has a PEG ratio of 1.43. 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 2.17 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 85, which puts it in the top 34% 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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