ORCL - Embedded Expectations Analysis - 2022 01 24
Oracle Corporation (ORCL) currently trades near corporate but above historical averages relative to Uniform earnings, with a 23.3x Uniform P/E (Fwd. V/E').At these levels, markets are pricing in expectations for Uniform ROA to decline to 29% by 2026, accompanied by 3% Uniform asset growth.
Meanwhile, analysts also expect Uniform ROA to compress to 29% in 2023, albeit with stronger 8% Uniform asset growth.
If sustained going forward, these levels would imply a stock price closer to $114, representing approximately 11% equity upside for the firm.
That said, the firm's most recent earnings call suggests management may be concerned about growth, database infrastructure, and autonomous solutions.
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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