Database-management company Oracle (NYSE:ORCL) is having a middling year. The stock performance isn’t awful but nothing to write home about. On a year-to-date basis, ORCL was up nearly 5% heading into its fiscal first-quarter 2019 earnings report. But based on most analysts’ interpretation, Oracle stock faces a make-it-or-break-it moment.

At issue here is the company’s efforts to fully transition into the cloud. Long reliant on its licensing business model, this approach is increasingly antiquated. Instead, database specialists have found success in subscription-based cloud platforms. This paradigm shift in strategy has allowed rivals like Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) to gain market share.

And this is what worried Wall Street. Oracle stock performed exceptionally well throughout much of the 2000s, particularly after the tech bubble. At that time, concepts such as the cloud or Software as a Solution (SaaS) existed only in theory. The infrastructure to actualize them would come later.

During this heyday, Oracle cemented its reputation as a database-management provider for big corporations. These industry stalwarts needed much more than a retail spreadsheet to accommodate their transaction volume. The licensing business model worked perfectly, sending ORCL stock to higher plateaus.

However, in the current decade, companies became smaller and more specialized. Cloud computing offered ready-made solutions for small and mid-sized businesses. Amazon and Microsoft fed off this new transition. The same couldn’t be said about ORCL.

The evidence came in its last earnings report. Management refused to disclose its cloud-business figures, which startled onlookers. Wall Street interpreted the change as a signal that ORCL had something to hide. Let’s be honest: it’s a reasonable assumption, and Oracle stock tumbled in the aftermath.

Is history going to repeat itself or will management finally get things right?

Oracle Has an Opportunity to Right the Ship

Despite the heavy concerns toward Oracle stock, the leadership team has the perfect forum to steady investor nerves. Based on the recently stabilized price, along with a robust recovery from its Q4 2018 report, I’m optimistic that ORCL can turn the tide.

For Q1 2019, consensus estimates call for earnings per share of 69 cents. As expected, this falls near the lower end of individual forecasts, which ranges from 66 cents to 75 cents.

Still, if the company manages to hit consensus, it would represent an 11% lift from the year-ago quarter. EPS at the time was 62 cents against a 60-cent target.

Sentiment-wise, the revenue picture is reverse that of the earnings situation. Analysts expect ORCL to deliver $9.3 billion. This is near the higher end of the spectrum, which runs from $9 billion to $9.4 billion. In Q1 2018, Oracle reported $9.2 billion.

Based on prior performances, the database-software firm has the goods to deliver a top and bottom beat. Moreover, it’s on a solid earnings streak, having beaten EPS targets for the past seven quarters.

But for Oracle stock, the difference comes down to the conference call and how management communicates their progress. In the last reporting quarter, Amazon took home 34% of the cloud market, and Microsoft hit 14%. International Business Machines (NYSE:IBM), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Alibaba (NYSE:BABA) rounded out the top five cloud providers.

Investors will look for any sign that the company has improved its cloud position. In this regard, the low expectations are beneficial for ORCL stock. Plus, against forward earnings, Oracle is undervalued. Still, investors will need to see some meat on the table before feeling comfortable about a longer-term position.

Oracle Stock Has Fundamental Strengths You Shouldn’t Ignore

Admittedly, Oracle stock looks rudderless compared to the consistently soaring share prices of Amazon and Microsoft. However, we should be careful to avoid ignoring Oracle’s fundamental strengths.

Primarily, management is sitting on a cash account that measures over $67 billion. That gives the company the resources to push more firmly into the cloud or any other vulnerable areas. Also, consider that Oracle doesn’t really maintain disparate businesses like Microsoft or Amazon.

In other words, Oracle is a database-management specialist at its core. It doesn’t have to spend resources manufacturing computers, running a physical retail outlet, or operating a grocery chain.

The other component favoring ORCL stock is that the underlying firm has a proven track record with big businesses. Amazon isn’t Oracle’s biggest concern, and that was apparent for quite some time. Indeed, Amazon picking up the most cloud market share isn’t surprising considering that they focus on smaller clients.

Oracle has always been about the big clients, and that’s where they have a leg up on the competition. Transitioning to the cloud is still vital, but let’s give credit where it’s due.

As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.