ORACLE CORP (ORCL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ORCL - US68389X1054 - Common Stock
169.01 USD
-3.79 (-2.19%)
167.83 USD
-1.18 (-0.7%)
We assign a fundamental rating of 5 out of 10 to ORCL. ORCL was compared to 278 industry peers in the Software industry. ORCL has a medium profitability rating, but doesn't score so well on its financial health evaluation. ORCL is growing strongly while it is still valued neutral. This is a good combination! ORCL also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- ORCL had positive earnings in the past year.
- In the past year ORCL had a positive cash flow from operations.
- Each year in the past 5 years ORCL has been profitable.
- Each year in the past 5 years ORCL had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 7.52%, ORCL is in the better half of the industry, outperforming 77.70% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 51.50%, ORCL belongs to the top of the industry, outperforming 96.76% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 10.28%, ORCL belongs to the top of the industry, outperforming 85.25% of the companies in the same industry.
- ORCL had an Average Return On Invested Capital over the past 3 years of 11.78%. This is in line with the industry average of 10.73%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.52% | ||
| ROE | 51.5% | ||
| ROIC | 10.28% |
ROA(3y)7.05%
ROA(5y)7.55%
ROE(3y)324.52%
ROE(5y)N/A
ROIC(3y)11.78%
ROIC(5y)12.8%
1.3 Margins
- ORCL's Profit Margin of 25.28% is amongst the best of the industry. ORCL outperforms 87.05% of its industry peers.
- ORCL's Profit Margin has declined in the last couple of years.
- The Operating Margin of ORCL (31.81%) is better than 93.88% of its industry peers.
- ORCL's Operating Margin has declined in the last couple of years.
- The Gross Margin of ORCL (68.54%) is comparable to the rest of the industry.
- ORCL's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.81% | ||
| PM (TTM) | 25.28% | ||
| GM | 68.54% |
OM growth 3Y-5.7%
OM growth 5Y-2.96%
PM growth 3Y11.06%
PM growth 5Y-3.53%
GM growth 3Y-3.75%
GM growth 5Y-2.42%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), ORCL is creating some value.
- Compared to 1 year ago, ORCL has more shares outstanding
- ORCL has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, ORCL has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 2.21 indicates that ORCL is not a great score, but indicates only limited risk for bankruptcy at the moment.
- ORCL has a Altman-Z score of 2.21. This is comparable to the rest of the industry: ORCL outperforms 52.52% of its industry peers.
- A Debt/Equity ratio of 3.49 is on the high side and indicates that ORCL has dependencies on debt financing.
- ORCL has a worse Debt to Equity ratio (3.49) than 85.97% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.49 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.21 |
ROIC/WACC0.95
WACC10.83%
2.3 Liquidity
- A Current Ratio of 0.91 indicates that ORCL may have some problems paying its short term obligations.
- With a Current ratio value of 0.91, ORCL is not doing good in the industry: 78.42% of the companies in the same industry are doing better.
- A Quick Ratio of 0.91 indicates that ORCL may have some problems paying its short term obligations.
- The Quick ratio of ORCL (0.91) is worse than 78.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.91 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 16.95% over the past year.
- ORCL shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.22% yearly.
- Looking at the last year, ORCL shows a quite strong growth in Revenue. The Revenue has grown by 11.08% in the last year.
- ORCL shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 8.00% yearly.
EPS 1Y (TTM)16.95%
EPS 3Y7.09%
EPS 5Y9.22%
EPS Q2Q%53.74%
Revenue 1Y (TTM)11.08%
Revenue growth 3Y10.59%
Revenue growth 5Y8%
Sales Q2Q%14.22%
3.2 Future
- ORCL is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 28.20% yearly.
- Based on estimates for the next years, ORCL will show a very strong growth in Revenue. The Revenue will grow by 31.83% on average per year.
EPS Next Y24.78%
EPS Next 2Y15.82%
EPS Next 3Y21.74%
EPS Next 5Y28.2%
Revenue Next Year17.39%
Revenue Next 2Y23.23%
Revenue Next 3Y31.52%
Revenue Next 5Y31.83%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 24.49, which indicates a rather expensive current valuation of ORCL.
- Compared to the rest of the industry, the Price/Earnings ratio of ORCL indicates a somewhat cheap valuation: ORCL is cheaper than 66.91% of the companies listed in the same industry.
- ORCL's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.39.
- Based on the Price/Forward Earnings ratio of 20.90, the valuation of ORCL can be described as rather expensive.
- 68.70% of the companies in the same industry are more expensive than ORCL, based on the Price/Forward Earnings ratio.
- ORCL is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.72, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.49 | ||
| Fwd PE | 20.9 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, ORCL is valued a bit cheaper than 74.10% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 22.06 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- The decent profitability rating of ORCL may justify a higher PE ratio.
- ORCL's earnings are expected to grow with 21.74% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.99
PEG (5Y)2.66
EPS Next 2Y15.82%
EPS Next 3Y21.74%
5. Dividend
5.1 Amount
- ORCL has a Yearly Dividend Yield of 1.12%.
- In the last 3 months the price of ORCL has falen by -35.64%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
- Compared to an average industry Dividend Yield of 0.54, ORCL pays a better dividend. On top of this ORCL pays more dividend than 92.45% of the companies listed in the same industry.
- Compared to the average S&P500 Dividend Yield of 1.82, ORCL is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.12% |
5.2 History
- On average, the dividend of ORCL grows each year by 12.29%, which is quite nice.
- ORCL has paid a dividend for at least 10 years, which is a reliable track record.
- ORCL has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)12.29%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
- ORCL pays out 34.81% of its income as dividend. This is a sustainable payout ratio.
- ORCL's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP34.81%
EPS Next 2Y15.82%
EPS Next 3Y21.74%
ORACLE CORP / ORCL FAQ
What is the ChartMill fundamental rating of ORACLE CORP (ORCL) stock?
ChartMill assigns a fundamental rating of 5 / 10 to ORCL.
What is the valuation status of ORACLE CORP (ORCL) stock?
ChartMill assigns a valuation rating of 4 / 10 to ORACLE CORP (ORCL). This can be considered as Fairly Valued.
What is the profitability of ORCL stock?
ORACLE CORP (ORCL) has a profitability rating of 6 / 10.
What are the PE and PB ratios of ORACLE CORP (ORCL) stock?
The Price/Earnings (PE) ratio for ORACLE CORP (ORCL) is 24.49 and the Price/Book (PB) ratio is 16.09.
Can you provide the expected EPS growth for ORCL stock?
The Earnings per Share (EPS) of ORACLE CORP (ORCL) is expected to grow by 24.78% in the next year.