A significant driver of top-line growth: Oracle Corporation (ORCL)

Oracle Corporation (NYSE: ORCL) stock fell -2.00% on Friday to $66.75 against a previous-day closing price of $68.11. With 6.71 million shares changed hands, the volume of the stock remained lighter than its average volume of 7.67 million shares. During the session, the Software – Infrastructure company that operates in wider Technology sector, reached to the highest price of $68.88 whereas the lowest price it dropped to was $66.74. The 52-week range on ORCL shows that it touched its highest point at $106.34 and its lowest point at $63.76 during that stretch. It currently has a 1-year price target of $89.54. With its current market cap of 183.62 billion, ORCL has annualized dividend of $1.28 while the current yield stands at 1.92%. Beta for the stock currently stands at 0.87.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ORCL was down-trending over the past week, with a drop of -7.45%, but this was down by -12.70% over a month. Three-month performance surged to 0.33% while six-month performance fell -18.40%. The stock lost -23.21% in the past year, while it has lost -23.46% so far this year. A look at the trailing 12-month EPS for ORCL yields 2.10 with Next year EPS estimates of 5.62. For the next quarter, that number is 1.18. This implies an EPS growth rate of -47.00% for this year and 13.46% for next year. EPS is expected to grow by 10.13% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 1.50%.

Float and Shares Shorts:

At present, 2.69 billion ORCL shares are outstanding with a float of 1.54 billion shares on hand for trading. On Jul 14, 2022, short shares totaled 15.44 million, which was 0.58% higher than short shares on Jun 14, 2022. In addition to Mr. Lawrence J. Ellison as the firm’s Co-Founder, Chairman & CTO, Ms. Safra Ada Catz serves as its CEO & Director.

Institutional Ownership:

Through their ownership of 43.00% of ORCL’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 43.40% of ORCL, in contrast to 21.85% held by mutual funds. Shares owned by individuals account for 21.24%. As the largest shareholder in ORCL with 4.90% of the stake, The Vanguard Group, Inc. holds 130,683,627 shares worth 130,683,627. A second-largest stockholder of ORCL, BlackRock Fund Advisors, holds 77,597,552 shares, controlling over 2.91% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in ORCL, holding 62,473,825 shares or 2.34% stake. With a 1.63% stake in ORCL, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 43,449,968 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 1.32% of ORCL stock, is the second-largest Mutual Fund holder. It holds 35,132,425 shares valued at 2.61 billion. First Eagle Global Fund holds 0.69% of the stake in ORCL, owning 18,452,220 shares worth 1.37 billion.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ORCL since 30 analysts follow the stock currently. There are 8 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 18 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ORCL analysts setting a high price target of $115.00 and a low target of $70.00, the average target price over the next 12 months is $88.61. Based on these targets, ORCL could surge 72.28% to reach the target high and rise by 4.87% to reach the target low. Reaching the average price target will result in a growth of 32.75% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. ORCL will report FY 2023 earnings on 06/21/2023. Analysts have provided yearly estimates in a range of $5.40 being high and $4.70 being low. For ORCL, this leads to a yearly average estimate of $5.00. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Oracle Corporation surprised analysts by -$0.04 when it reported $1.03 EPS against a consensus estimate of $1.07. The surprise factor in the prior quarter was $0.17. Based on analyst estimates, the high estimate for the next quarter is $1.21 and the low estimate is $1.08. The average estimate for the next quarter is thus $1.17.

Summary of Insider Activity:

Insiders traded ORCL stock several times over the past three months with 19 Buys and 21 Sells. In these transactions, 4,172,813 shares were bought while 3,909,750 shares were sold. The number of buy transactions has increased to 43 while that of sell transactions has risen to 38 over the past year. The total number of shares bought during that period was 13,863,985 while 6,655,714 shares were sold.

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