Oracle Corporation (ORCL) Makes Hay From Its Cloud

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Oracle Corporation (NYSE:ORCL) shares are up nearly 9% in mid-day trading on Thursday after reporting better-than-expected results for its fiscal fourth quarter, lifting ORCL stock to new record highs. The share price lift leaves behind a four-month consolidation range near $45.

Investors zeroed in on Oracle’s cloud results, which provided the most lucid take on the company’s turnaround (as it was a relative latecomer in the cloud business). In that regard, ORCL did not disappoint, showing public cloud revenue growth of 23% to $208 million year-over-year and software-as-a-service sales growth of 61% to $3.2 billion.

The software company reported earnings of 89 cents per share on a 3.3% jump in revenue. Both beat estimates as Oracle continues to find success shifting toward cloud-based services. Total cloud revenues were up 58% to 1.36 billion.

What This Means for ORCL Stock

Analysts at Wedbush upgraded the stock following the earnings release, looking for a price target of $56 on better visibility into double-digit earnings per share growth potential, evidence of accelerating success in its software-as-a-service transition and solid sales pipeline checks.

The company will next report results on Sept. 20 after the close. Management has guided for earnings of between 59 and 61 cents per share capping double-digit earnings growth for the full year.

First-quarter revenue growth is expected to total between 4% and 6%, ahead of market expectations. For its cloud business, management is looking for Q1 year-over-year revenue growth of up to a whopping 52%.

ORCL stock is up 8.5% as of this writing.

Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. A two-week and four-week free trial offer has been extended to Investorplace readers.


Article printed from InvestorPlace Media, https://investorplace.com/2017/06/oracle-corporation-orcl-makes-hay-from-its-cloud/.

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