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Why Is Oracle (ORCL) Stock Up 11% Today?

  • Oracle (ORCL) stock is jumping after Oracle reported better-than-expected quarterly earnings.
  • The company's cloud infrastructure unit delivered strong results.
  • Deutsche Bank (DB) is bullish on ORCL stock.
ORCL stock - Why Is Oracle (ORCL) Stock Up 11% Today?

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Oracle (NYSE:ORCL) stock is climbing 11% in pre-market trading after the company reported quarterly results that came in above analysts’ average estimates. The strength of the company’s fiscal fourth-quarter results was largely due to the rapid expansion of its cloud infrastructure unit.

Oracle reported a Q4 top line of $11.84 billion, above analysts’ mean estimate of $11.66 billion. The company generated earnings per share of $1.54, excluding some items, versus the average outlook of $1.37. And in the current quarter, Oracle expects its revenue to jump 17% – 18% year-over-year (YOY). On the other hand, the company anticipates that it will generate an earnings per share (EPS) of $1.04 to $1.08 in the first quarter, versus analysts’ average outlook of $1.13.

Powerful Growth Helps Lift ORCL Stock

Oracle’s Cloud and on-premise licensing revenue jumped 16% YOY last quarter, excluding currency changes, reaching $2.54 billion. Meanwhile, the sales of the company’s strategic back-office cloud applications soared 24% YOY, excluding currency fluctuations, and its Q4 operating margin came in at a robust 47%.

“What Q4 demonstrates is that our business is accelerating,” Oracle CEO Safra Catz said on the company’s Q4 conference call yesterday. She added:

A growing list of customers, many new to Oracle are choosing us for more products and services as they understand the benefits of Oracle technology. Clearly, our revenue growth accelerated this year as investments into our cloud businesses are paying off.

Catz noted that the company is benefiting from cross-selling, and she reported that Oracle had repurchased $600 million of ORCL stock last quarter. Addressing the company’s outlook, the CEO said that: “we feel very optimistic.”

Deutsche Bank Is Bullish on Oracle

In a note to investors, Deutsche Bank (NYSE:DB) wrote that the company’s fiscal Q4 earnings were “exceptional,” adding that Oracle’s  “underappreciated organic growth is worthy of multiple rerating along with upside to estimates.” The firm maintained a $110 price target and a “buy” rating on the name.

On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.

Article printed from InvestorPlace Media, https://investorplace.com/2022/06/why-is-oracle-orcl-stock-up-11-today/.

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