Yahoo Finance Oracle Corporation (NYSE:ORCL): Are Analysts Bullish?
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In June 2019, Oracle Corporation (NYSE:ORCL) released its latest earnings announcement, which revealed that the business gained from a major tailwind, more than doubling its earnings from the prior year. Below is my commentary, albeit very simple and high-level, on how market analysts perceive Oracle's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Check out our latest analysis for Oracle
Market analysts' prospects for this coming year seems pessimistic, with earnings declining by -2.9%. But in the following year, there is a complete contrast in performance, with reaching double digit 1.7% compared to today’s level and continues to increase to US$12b in 2022.
Even though it’s informative understanding the growth year by year relative to today’s value, it may be more insightful gauging the rate at which the business is moving on average every year. The pro of this approach is that we can get a better picture of the direction of Oracle's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 1.3%. This means, we can presume Oracle will grow its earnings by 1.3% every year for the next few years.
Next Steps:
For Oracle, I've compiled three important factors you should further examine:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is ORCL worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether ORCL is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ORCL? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
