Oracle Corporation (ORCL) recently announced its latest quarterly earnings report, which showed slightly worse-than-expected revenue results, causing the company’s stock to fall. However, the company’s CEO, Safra Catz, emphasized the strong growth of Oracle’s two cloud businesses.
For the quarter ending February 28, 2021, Oracle reported revenue of $10.1 billion, which was slightly below analysts’ expectations of $10.07 billion. The company’s earnings per share of $1.16, however, exceeded estimates of $1.11.
Despite the revenue miss, Oracle’s cloud businesses continued to show impressive growth. The company’s cloud infrastructure business saw constant currency revenue growth of 40%, while its cloud applications business saw constant currency revenue growth of 55%. These two businesses make up the bulk of Oracle’s cloud revenue, which increased 5% year over year to $2.9 billion.
Oracle’s earnings report also included forecasts for the current quarter, which were generally in line with analysts’ expectations. The company expects revenue to increase between 5% and 7% year over year, with earnings per share in the range of $1.28 to $1.32.
In addition to its earnings report, Oracle also announced a new $20 billion share repurchase program. This program replaces the company’s previous $15 billion share repurchase program, which expired in December 2021.
Oracle’s revenue miss may have disappointed investors, but the strong growth of the company’s cloud businesses suggests that the company is continuing to successfully pivot to a cloud-based business model. The company’s positive earnings per share and in-line forecasts for the current quarter further support this trend. The announcement of the new share repurchase program is also a positive sign for investors, indicating that the company is confident in its future prospects.
ORCL Stock Forecast & Analysis
According to 20 analysts, Oracle Corporation’s average target price over the next 12 months is USD 88.54 with an average rating of Buy. Stock Target Advisor’s analysis is also Bullish based on 11 positive signals and 4 negative signals. Oracle’s current stock price at the time of writing was USD 88.49, having increased by +2.49% over the past week, +2.08% over the past month, and +20.67% over the last year.