After the bell sounded yesterday and Monday’s trading session concluded, Oracle (ORCL) released 4th quarter earnings that delighted investors and analysts alike. This led to a 5% climb in after-hours trading. And in Tuesday’s session, the stock opened 6% higher before falling back down and settling around a 2% gain – so far, at least.
The company exceeded Wall Street’s estimates on both the top and bottom lines for the quarter. Revenue came in at $13.84 billion compared to the $13.74 billion experts were expecting. This was a 17% growth year over year. Meanwhile, EPS beat out the expected $1.58 per share with a figure of $1.67 per share.
Much of this growth can be attributed to a dramatic expansion in the company’s cloud business segment. This was a business that was born just 7 years ago – and it reached a recent milestone of $5 billion in annualized revenue. One analyst expects this figure to double within 2 years. Part of this can be attributed to a big achievement in the recent quarter – securing approval for US defense and intelligence agency use.
But, that’s not all. The business is looking ahead to the future and jumping aboard the AI hype train as well. Oracle is in the midst of introducing a generative AI cloud service in collaboration with Cohere – a Canadian startup that provides natural language processing models.
The goal of the new service is to empower Oracle customers to protect their training data and use their own private data safety to create their own specialized large-language models. The company itself has already begun leveraging the power of this software within its own processes internally.
So far this year, ORCL is up nearly 43%, outpacing the S&P 500 index dramatically. And with the bullish outlook on this stock, you have to wonder – is it worth adding to your own portfolio? We’ve analyzed the stock through the VectorVest stock forecasting software. And, we see 3 more reasons beyond what we’ve talked about so far to consider buying ORCL:
ORCL Has Good Upside Potential, Very Good Safety, and Excellent Timing
The VectorVest system simplifies your trading strategy by giving you all the insights you need in 3 ratings. These are relative value (RV), relative safety (RS), and relative timing (RT). Each of these sits on an easy-to-understand scale of 0.00-2.00, with 1.00 being the average.
But using the system gets even easier, as you’re given a clear buy, sell, or hold recommendation based on these ratings - for any given stock, at any given time. And right now, we’ve got 3 things you need to see as it pertains to ORCL:
- Good Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (projected 3 years out) to AAA corporate bond rates and risk. As for ORCL, the RV rating of 1.11 is good. Still, it’s worth noting that the stock is slightly overvalued - with a current value of $101/share.
- Very Good Safety: In terms of risk, ORCL has very good safety - as evidenced by the RS rating of 1.25. This rating is calculated through a deep analysis of the company’s financial consistency & predictability, debt-to-equity ratio, and business longevity.
- Excellent Timing: Tying it all together is an excellent RT rating of 1.52 - suggesting a strong positive price trend is going to push this stock’s price higher and higher. The rating is based on the direction, dynamics, and magnitude of the stock’s price movement day over day, week over week, quarter over quarter, and year over year.
The overall VST rating of 1.32 is good for ORCL. Does that mean the time is right to buy shares of this stock? Get a free stock analysis at VectorVest today to feel confident making your next move one way or the other!
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VectorVest advocates buying safe, undervalued stocks, rising in price. While the ORCL earnings report itself has investors and analysts excited, that’s just the tip of the iceberg for this stock right now. Upon closer inspection, the stock has good upside potential, very good safety, and excellent timing.
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