Results: Oracle Corporation Exceeded Expectations And The Consensus Has Updated Its Estimates
Oracle Corporation (NYSE:ORCL) just released its quarterly report and things are looking bullish. Oracle beat earnings, with revenues hitting US$9.4b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 11%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Oracle after the latest results.
Check out our latest analysis for Oracle
Following last week's earnings report, Oracle's 27 analysts are forecasting 2021 revenues to be US$39.9b, approximately in line with the last 12 months. Statutory per share are forecast to be US$3.32, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$39.2b and earnings per share (EPS) of US$3.16 in 2021. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 10.0% to US$59.87. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Oracle, with the most bullish analyst valuing it at US$70.00 and the most bearish at US$30.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of Oracle'shistorical trends, as next year's 1.6% revenue growth is roughly in line with 1.4% annual revenue growth over the past five years. Compare this with the wider industry (in aggregate), which analyst estimates suggest will see revenues grow 12% next year. So it's pretty clear that Oracle is expected to grow slower than similar companies in the same industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Oracle's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Oracle's revenues are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Oracle going out to 2025, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 1 warning sign for Oracle that you need to be mindful of.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
