Oracle (ORCL, $77.22) shares fall, on lower-than-expected guidance
Oracle shares dropped -5% in extended trading on Tuesday, despite earnings beat. It provided a lower-than-expected guidance on quarterly revenue. The computer tech company also expressed plans to boost capital expenditures for cloud computing workloads.
Adjusted earnings for the fiscal fourth quarter came in at $1.54 per share, beating the $1.31 per share expected by analysts, according to Refinitiv.
Revenue for the quarter rose +8% year-over-year (vs. +3% in the prior quarter) to $11.23 billion, compared to $11.04 billion as expected by analysts (according to Refinitiv). Revenue growth got a boost from base effect since the prior-year quarter revenue fell around -6% amid the coronavirus pandemic.
Revenue from the cloud services and license support business was $7.39 billion, up +8% and above the FactSet consensus estimate of $7.32 billion. According to the company, revenue from its second-generation cloud infrastructure doubled in the quarter.
The cloud license and on-premises license segment generated $2.14 billion in revenue, growing +9% and beating consensus estimate of $2.05 billion.
The company’s hardware revenue fell -2% to $882 million, in line with analysts’ estimates.
Looking ahead, Oracle is expecting adjusted earnings of 94 cents to 98 cents in per share for the fiscal first quarter, vs. $1.03 per share projected by analysts polled by Refinitiv. The company forecasts 3% to 5% revenue growth for that quarter, vs. 3% revenue growth estimated by analysts surveyed by Refinitiv.
According to Oracle, it expects to roughly double its cloud capex spending in FY 2022 to nearly $4 billion. “We are confident that the increased return in the cloud business more than justifies this increased investment, and our margins will expand over time,” CEO Safra Catz said.
ORCL's Stochastic Oscillator is sitting in oversold zone for 15 days
The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an uptrend is expected.
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator entered the oversold zone -- be on the watch for ORCL's price rising or consolidating in the future. That's also the time to consider buying the stock or exploring call options.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where ORCL advanced for three days, in of 344 cases, the price rose further within the following month. The odds of a continued upward trend are .
ORCL may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In of 306 cases where ORCL Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on April 01, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on ORCL as a result. In of 80 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for ORCL turned negative on March 28, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 43 similar instances when the indicator turned negative. In of the 43 cases the stock turned lower in the days that followed. This puts the odds of success at .
ORCL moved below its 50-day moving average on April 17, 2024 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ORCL declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 90, placing this stock better than average.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. ORCL’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (61.350) is normal, around the industry mean (29.910). P/E Ratio (33.108) is within average values for comparable stocks, (155.839). Projected Growth (PEG Ratio) (1.057) is also within normal values, averaging (2.725). Dividend Yield (0.013) settles around the average of (0.081) among similar stocks. P/S Ratio (6.720) is also within normal values, averaging (55.319).
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a developer of a diversified line of business software products
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