ORACLE CORP (ORCL) Stock Fundamental Analysis
NYSE:ORCL - New York Stock Exchange, Inc. - US68389X1054 - Common Stock - Currency: USD
Taking everything into account, ORCL scores 5 out of 10 in our fundamental rating. ORCL was compared to 283 industry peers in the Software industry. While ORCL has a great profitability rating, there are quite some concerns on its financial health. ORCL has a decent growth rate and is not valued too expensively. Finally ORCL also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
ORCL had positive earnings in the past year.
In the past year ORCL had a positive cash flow from operations.
In the past 5 years ORCL has always been profitable.
ORCL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ORCL's Return On Assets of 7.54% is amongst the best of the industry. ORCL outperforms 82.33% of its industry peers.
Looking at the Return On Equity, with a value of 72.68%, ORCL belongs to the top of the industry, outperforming 96.82% of the companies in the same industry.
With an excellent Return On Invested Capital value of 12.27%, ORCL belongs to the best of the industry, outperforming 89.75% of the companies in the same industry.
ORCL had an Average Return On Invested Capital over the past 3 years of 13.58%. This is above the industry average of 11.25%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.54% | ||
| ROE | 72.68% | ||
| ROIC | 12.27% |
ROA(3y)6.63%
ROA(5y)7.83%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)13.58%
ROIC(5y)13.47%
1.3 Margins
ORCL has a Profit Margin of 21.80%. This is amongst the best in the industry. ORCL outperforms 86.93% of its industry peers.
In the last couple of years the Profit Margin of ORCL has declined.
ORCL has a Operating Margin of 31.80%. This is amongst the best in the industry. ORCL outperforms 95.76% of its industry peers.
In the last couple of years the Operating Margin of ORCL has declined.
ORCL has a Gross Margin (71.12%) which is comparable to the rest of the industry.
ORCL's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.8% | ||
| PM (TTM) | 21.8% | ||
| GM | 71.12% |
OM growth 3Y-8.01%
OM growth 5Y-3.09%
PM growth 3Y-16.51%
PM growth 5Y-6.77%
GM growth 3Y-3.95%
GM growth 5Y-2.19%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ORCL is still creating some value.
Compared to 1 year ago, ORCL has more shares outstanding
Compared to 5 years ago, ORCL has less shares outstanding
ORCL has a better debt/assets ratio than last year.
2.2 Solvency
ORCL has an Altman-Z score of 2.06. This is not the best score and indicates that ORCL is in the grey zone with still only limited risk for bankruptcy at the moment.
ORCL's Altman-Z score of 2.06 is in line compared to the rest of the industry. ORCL outperforms 54.42% of its industry peers.
ORCL has a debt to FCF ratio of 16.57. This is a negative value and a sign of low solvency as ORCL would need 16.57 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 16.57, ORCL is in line with its industry, outperforming 45.58% of the companies in the same industry.
ORCL has a Debt/Equity ratio of 5.27. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 5.27, ORCL is doing worse than 84.45% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.27 | ||
| Debt/FCF | 16.57 | ||
| Altman-Z | 2.06 |
ROIC/WACC1.15
WACC10.66%
2.3 Liquidity
ORCL has a Current Ratio of 1.02. This is a normal value and indicates that ORCL is financially healthy and should not expect problems in meeting its short term obligations.
ORCL has a Current ratio of 1.02. This is in the lower half of the industry: ORCL underperforms 75.27% of its industry peers.
A Quick Ratio of 1.02 indicates that ORCL should not have too much problems paying its short term obligations.
The Quick ratio of ORCL (1.02) is worse than 74.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.02 | ||
| Quick Ratio | 1.02 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.24% over the past year.
The Earnings Per Share has been growing by 9.49% on average over the past years. This is quite good.
The Revenue has been growing slightly by 6.23% in the past year.
The Revenue has been growing slightly by 6.04% on average over the past years.
EPS 1Y (TTM)6.24%
EPS 3Y5.9%
EPS 5Y9.49%
EPS Q2Q%4.26%
Revenue 1Y (TTM)6.23%
Revenue growth 3Y9.37%
Revenue growth 5Y6.04%
Sales Q2Q%6.4%
3.2 Future
Based on estimates for the next years, ORCL will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.08% on average per year.
ORCL is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 14.67% yearly.
EPS Next Y9.45%
EPS Next 2Y10.63%
EPS Next 3Y14.09%
EPS Next 5Y19.08%
Revenue Next Year7.2%
Revenue Next 2Y10.68%
Revenue Next 3Y13.17%
Revenue Next 5Y14.67%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 21.58 indicates a rather expensive valuation of ORCL.
Based on the Price/Earnings ratio, ORCL is valued a bit cheaper than the industry average as 72.08% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 28.29, ORCL is valued a bit cheaper.
With a Price/Forward Earnings ratio of 18.87, ORCL is valued on the expensive side.
78.45% of the companies in the same industry are more expensive than ORCL, based on the Price/Forward Earnings ratio.
ORCL's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.08.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.58 | ||
| Fwd PE | 18.87 |
4.2 Price Multiples
80.57% of the companies in the same industry are more expensive than ORCL, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as ORCL.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 62.06 | ||
| EV/EBITDA | 18.46 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of ORCL may justify a higher PE ratio.
A more expensive valuation may be justified as ORCL's earnings are expected to grow with 14.09% in the coming years.
PEG (NY)2.28
PEG (5Y)2.27
EPS Next 2Y10.63%
EPS Next 3Y14.09%
5. Dividend
5.1 Amount
ORCL has a Yearly Dividend Yield of 1.50%.
In the last 3 months the price of ORCL has falen by -20.13%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 14.48, ORCL pays a better dividend. On top of this ORCL pays more dividend than 93.99% of the companies listed in the same industry.
With a Dividend Yield of 1.50, ORCL pays less dividend than the S&P500 average, which is at 2.57.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.5% |
5.2 History
On average, the dividend of ORCL grows each year by 15.04%, which is quite nice.
ORCL has paid a dividend for at least 10 years, which is a reliable track record.
ORCL has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)15.04%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
36.53% of the earnings are spent on dividend by ORCL. This is a low number and sustainable payout ratio.
The dividend of ORCL is growing, but earnings are growing more, so the dividend growth is sustainable.
DP36.53%
EPS Next 2Y10.63%
EPS Next 3Y14.09%
128.62
-1.14 (-0.88%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners44.86%
Inst Owner Change0.02%
Ins Owners0.14%
Ins Owner Change0%
Market Cap360.68B
Analysts78.26
Price Target191.22 (48.67%)
Short Float %1.32%
Short Ratio1.79
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.5% |
Yearly Dividend1.61
Dividend Growth(5Y)15.04%
DP36.53%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-3.05%
Min EPS beat(2)-3.45%
Max EPS beat(2)-2.65%
EPS beat(4)1
Avg EPS beat(4)-1.55%
Min EPS beat(4)-3.45%
Max EPS beat(4)2.86%
EPS beat(8)4
Avg EPS beat(8)-0.15%
EPS beat(12)6
Avg EPS beat(12)0.28%
EPS beat(16)9
Avg EPS beat(16)1.47%
Revenue beat(2)0
Avg Revenue beat(2)-3.03%
Min Revenue beat(2)-3.73%
Max Revenue beat(2)-2.33%
Revenue beat(4)0
Avg Revenue beat(4)-2.8%
Min Revenue beat(4)-3.74%
Max Revenue beat(4)-1.4%
Revenue beat(8)0
Avg Revenue beat(8)-2.43%
Revenue beat(12)0
Avg Revenue beat(12)-2.02%
Revenue beat(16)0
Avg Revenue beat(16)-1.84%
PT rev (1m)-4.42%
PT rev (3m)-3.75%
EPS NQ rev (1m)-1.22%
EPS NQ rev (3m)-10.41%
EPS NY rev (1m)-2.73%
EPS NY rev (3m)-3.01%
Revenue NQ rev (1m)-0.28%
Revenue NQ rev (3m)-2.62%
Revenue NY rev (1m)-1.06%
Revenue NY rev (3m)-1.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.58 | ||
| Fwd PE | 18.87 | ||
| P/S | 6.47 | ||
| P/FCF | 62.06 | ||
| P/OCF | 17.39 | ||
| P/B | 21.56 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.46 |
EPS(TTM)5.96
EY4.63%
EPS(NY)6.82
Fwd EY5.3%
FCF(TTM)2.07
FCFY1.61%
OCF(TTM)7.4
OCFY5.75%
SpS19.89
BVpS5.97
TBVpS-18.03
PEG (NY)2.28
PEG (5Y)2.27
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.54% | ||
| ROE | 72.68% | ||
| ROCE | 13.46% | ||
| ROIC | 12.27% | ||
| ROICexc | 14.19% | ||
| ROICexgc | 34.68% | ||
| OM | 31.8% | ||
| PM (TTM) | 21.8% | ||
| GM | 71.12% | ||
| FCFM | 10.42% |
ROA(3y)6.63%
ROA(5y)7.83%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)13.58%
ROIC(5y)13.47%
ROICexc(3y)16.17%
ROICexc(5y)19.16%
ROICexgc(3y)52.15%
ROICexgc(5y)85.55%
ROCE(3y)14.9%
ROCE(5y)14.78%
ROICexcg growth 3Y-21.61%
ROICexcg growth 5Y-34.19%
ROICexc growth 3Y-14.61%
ROICexc growth 5Y-9.52%
OM growth 3Y-8.01%
OM growth 5Y-3.09%
PM growth 3Y-16.51%
PM growth 5Y-6.77%
GM growth 3Y-3.95%
GM growth 5Y-2.19%
F-Score6
Asset Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.27 | ||
| Debt/FCF | 16.57 | ||
| Debt/EBITDA | 3.71 | ||
| Cap/Depr | 247.56% | ||
| Cap/Sales | 26.77% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 87.27% | ||
| Profit Quality | 47.8% | ||
| Current Ratio | 1.02 | ||
| Quick Ratio | 1.02 | ||
| Altman-Z | 2.06 |
F-Score6
WACC10.66%
ROIC/WACC1.15
Cap/Depr(3y)132.9%
Cap/Depr(5y)104.92%
Cap/Sales(3y)13.67%
Cap/Sales(5y)10.06%
Profit Quality(3y)95.76%
Profit Quality(5y)100.3%
High Growth Momentum
Growth
EPS 1Y (TTM)6.24%
EPS 3Y5.9%
EPS 5Y9.49%
EPS Q2Q%4.26%
EPS Next Y9.45%
EPS Next 2Y10.63%
EPS Next 3Y14.09%
EPS Next 5Y19.08%
Revenue 1Y (TTM)6.23%
Revenue growth 3Y9.37%
Revenue growth 5Y6.04%
Sales Q2Q%6.4%
Revenue Next Year7.2%
Revenue Next 2Y10.68%
Revenue Next 3Y13.17%
Revenue Next 5Y14.67%
EBIT growth 1Y14.36%
EBIT growth 3Y0.61%
EBIT growth 5Y2.77%
EBIT Next Year31.48%
EBIT Next 3Y21.44%
EBIT Next 5Y23.52%
FCF growth 1Y-20.36%
FCF growth 3Y-4.96%
FCF growth 5Y-1.74%
OCF growth 1Y33.81%
OCF growth 3Y5.53%
OCF growth 5Y5.11%