ORCL - Embedded Expectations Analysis - 2019 04 22
Oracle Corporation (ORCL:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 16.5x Uniform P/E, implying bearish expectations for the firm. Moreover, management has concerns about demand for and sales of their Autonomous Database, competition in the ERP market, and declines in consulting services bookings.Specifically, management may be exaggerating their app ecosystem momentum, the strength of their strategic partnership with the Gap, and the revenue growth derived from adding salespeople internationally and domestically. Moreover, in regard to their Autonomous Database, they may be exaggerating the demand, new customer additions, and the amount of engagement coming from executives. In addition, they may be concerned about competition in the ERP market, and their ability to achieve growth guidance, and expand their ERP user base. Also, they may lack confidence in the potential of their R&D spending, and ability to sustain growth in consulting services booking, security, and ERP and HCM sales. Finally, they may be concerned about their ability to offset broad consulting service declines with cloud consulting growth, and may be exaggerating their readiness to take on migrating customers.
Oracle provides products and services that address enterprise information technology (IT) environments. The company's products and services include applications and infrastructure offerings. The company's cloud and license business engages in the sale, marketing and delivery of its applications and infrastructure technologies through cloud and on-premise deployment models including its cloud services and license support offerings; and its cloud license and on-premise license offerings. The company's hardware business provides Oracle Engineered Systems, servers, storage, industry-specific hardware, operating systems, virtualization, management and other hardware-related software to support diverse IT environments.
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