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Oracle Q1 Preview: Double-Digit Revenue Growth Inbound?

·3 min read

It’s no secret that the Zacks Computer and Technology Sector has been hit hard in 2022 amid higher interest rates, down nearly 30% and widely lagging the general market.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

A widely-popular stock in the sector, Oracle ORCL, is on deck to unveil Q1 earnings on Monday, September 12th, after the market close.

Oracle is one of the largest enterprise-grade database, middleware, and application software providers, offering cloud solutions and services that can be used to build and manage various cloud deployment models.

Currently, the company sports a Zacks Rank #2 (Buy) with an overall VGM Score of a D.

How does everything stack up for the company heading into the print? Let’s take a closer look.

Share Performance & Valuation

Oracle shares have displayed relative strength year-to-date, declining roughly 13% in value and widely outperforming the general market.

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Zacks Investment Research


Image Source: Zacks Investment Research

Over the last month, ORCL shares have continued to display relative strength, outperforming the S&P 500’s decline of nearly 6%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

The favorable price action of Oracle shares indicates that buyers have defended the stock at a much higher level than others, something we’ve rarely seen in 2022.

In addition, ORCL shares trade at favorable valuation multiples – the company’s 16.7X forward earnings multiple sits at its five-year median of 16.6X and represents a steep 25% discount relative to its Zacks Sector.

Oracle carries a Style Score of a C for Value.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Quarterly Estimates

A singular analyst has lowered their earnings outlook for the quarter over the last 60 days. Still, the Zacks Consensus EPS Estimate of $1.07 pencils in a notable 4% Y/Y uptick in quarterly earnings.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

The company’s top-line is also in great shape – Oracle is forecasted to have generated $11.5 billion in revenue throughout the quarter, good enough for a sizable 18% uptick compared to year-ago quarterly sales of $9.7 billion.

Quarterly Performance & Market Reactions

Oracle has a strong earnings track record – the company has exceeded the Zacks Consensus EPS Estimate in nine of its previous ten quarterly reports. Just in its latest print, ORCL penciled in a substantial 12% bottom-line beat.

Top-line results have been nearly just as remarkable; ORCL has beat revenue estimates in eight of its previous ten quarters. Below is a chart illustrating the company’s revenue on a quarterly basis.

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Zacks Investment Research


Image Source: Zacks Investment Research

In addition, it’s worth noting that shares have moved upwards following each of the company’s last three prints by at least 2.3% in each instance.

Putting Everything Together

Oracle shares have been notably defensive in 2022, indicating that buyers have been out in full force.

The company’s shares trade at solid valuation levels, with its forward P/E ratio nicely below its Zacks Sector average.

A singular analyst has lowered their earnings outlook, but projections allude to an increase in both revenue and earnings.

Further, the company has consistently exceeded quarterly estimates, and the market has had favorable reactions following each of its last three.

Heading into the print, Oracle ORCL carries a Zacks Rank #2 (Buy) with an overall VGM Score of a D.


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