ORCL - Embedded Expectations Analysis - 2021 10 29
Oracle Corporation (ORCL) currently trades near corporate but above historical averages relative to Uniform earnings, with a 23.2x Uniform P/E (Fwd. V/E').At these levels, markets are pricing in expectations for Uniform ROA to maintain current levels, accompanied by 3% Uniform asset growth.
Meanwhile, if sustained going forward, analyst expectations for 29% Uniform ROA and 7% Uniform asset growth would imply a stock price closer to $105, representing approximately 10% equity upside for the firm.
Moreover, the firm's most recent earnings call suggests management is excited about revenue guidance and cloud opportunities.
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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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
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Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
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- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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