Oracle Corporation develops, manufactures, markets, sells, hosts, and supports application, platform, and infrastructure technologies for information technology (IT) environments worldwide. The last earnings update was 88 days ago. More info.
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value. We use
analyst's estimates of cash flows going forward 5 years.
See our documentation to learn about this calculation.
|Levered FCF (USD, Millions)||$13,460.39||$14,211.12||$15,544.38||$15,078.00||$16,460.00|
|Source||Analyst x17||Analyst x18||Analyst x12||Analyst x1||Analyst x1|
Discounted (@ 11.5%)
Present value of next 5 years cash flows:
Terminal Value = FCF2022 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = $16,460 × (1 + 2.47%) ÷ (11.5% – 2.47%)
Terminal value based on the Perpetuity Method where growth (g) =
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows +
$162,345 = $54,018 + $108,326
Value = Total value / Shares Outstanding ($162,345 / 4,082)Discount to Share Price
Value per share (USD): $39.77
Current discount (share price of $47.00): -18.19%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 11.5% = 2.47% + (1.2 * 7.53%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value ($191,868,711,000).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
1.2 = 0.917 (1 + (1- 2.7%) (31.69%))
Levered Beta used in calculation = 1.2
Ms. Safra Ada Catz has been the Chief Executive Officer of Oracle Corporation since September 17, 2014 and serves as its Principal Financial Officer. Ms. Catz served as the President of Oracle Corporation from January 2004 to September 2014 and served as its Chief Financial Officer since April 25, 2011. Ms. Catz served as Chief Financial Officer of Oracle Corporation from November 15, 2005 to September 2008 and also served as its Interim Chief Financial Officer from April 2005 to July 2005. Ms. Catz served as a Co-President of PeopleSoft, Inc. since December 30, 2004. She served as the President of Oracle Corporation from January 2004 to June 2005. She served as the Executive Vice President of Oracle Corp. from November 1999 to January 2004 and was responsible for Global Business Practices and Corporate Development. She served as Senior Vice President of Oracle Corp., from April 1999 to October 1999. Prior to joining Oracle, Ms. Catz was employed by Donaldson, Lufkin & Jenrette, a global investment bank which has since merged with Credit Suisse First Boston. At Donaldson, Lufkin & Jenrette, Ms. Catz served as the Managing Director from February 1997 to March 1999 and a Senior Vice President from January 1994 to February 1997 and previously held various investment banking positions since 1986. Ms. Catz has been a Director of Oracle Corporation since October 2001. She has been a Member of Executive Council of TechNet since March 14, 2013. Ms. Catz served as an Independent Non-Executive Director of HSBC Holdings plc from May 1, 2008 to December 31, 2015. She served as a Director of PeopleSoft Inc. since December 30, 2004 and Stellent Inc. since December 12, 2006. She served as a Director of Hyperion Solutions Corp. since April 14, 2007.
Average tenure and age of the Oracle management team in years:
Average tenure and age of the Oracle board of directors in years:
Oracle is trading at price-to-earnings (PE) ratio of 53.22x, this tells us the stock is overvalued compared to the US market average ratio of 18.33x , and overvalued based on current earnings compared to the software industry average of 34.72x. … NYSE:ORCL PE PEG Gauge May 24th 18 After looking at ORCL's value based on current earnings, we can see it seems overvalued relative to other companies in the industry. … However, since Oracle is a high-growth stock, we must also account for its earnings growth by using calculation called the PEG ratio.Simply Wall St - – Full article
Margin Calculation for ORCL Profit Margin = Net Income ÷ Revenue ∴ Profit Margin = 3.65 Billion ÷ 39.47 Billion = 9.25% There has been a contraction in Oracle's margin over the past five years, due to postive average revenue growth of 0.68% and decline in net income of -2.89% on average, indicating that that a smaller percentage of revenue is being converted in to net income despite the top line growth. … For Oracle in particular, future profit margin is expected to expand along with the Software industry margins, whilst at the same time, ORCL’s forecasted ROE of 27.09% exceeds that of the expected 13.35% ROE of the industry (note that this observation is also influenced by relative debt levels). … Thus, it is essential to run your own analysis on Oracle's future earnings whilst maintaining a watchful eye over the sustainability of their cost management methods and the runway for top line growth.Simply Wall St - – Full article
Check out our latest analysis for Oracle How does ORCL’s operating cash flow stack up against its debt? … On top of this, ORCL has produced US$14.13B in operating cash flow over the same time period, leading to an operating cash to total debt ratio of 24.39%, meaning that ORCL’s operating cash is sufficient to cover its debt. … Next Steps: At its current level of cash flow coverage, ORCL has room for improvement to better cushion for events which may require debt repayment.Simply Wall St - – Full article
View our latest analysis for Oracle Here's how I find good dividend stocks When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas: Is it paying an annual yield above 75% of dividend payers? … In terms of its peers, Oracle generates a yield of 1.67%, which is high for Software stocks but still below the market's top dividend payers. … Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you.Simply Wall St - – Full article
Does Oracle tick all the boxes of a great dividend stock? … See our latest analysis for Oracle 5 questions I ask before picking a dividend stock Whenever I am looking at a potential dividend stock investment, I always check these five metrics: Is it the top 25% annual dividend yield payer? … Compared to its peers, Oracle produces a yield of 1.70%, which is high for Software stocks but still below the market's top dividend payers.Next Steps: Whilst there are few things you may like about Oracle from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor.Simply Wall St - – Full article
5-year cash flow forecast 2018 2019 2020 2021 2022 Levered FCF ($, Millions) $13,362.18 $13,998.44 $15,444.32 $15,025.00 $16,402.00 Source Analyst x21 Analyst x19 Analyst x11 Analyst x1 Analyst x1 Present Value Discounted @ 11.27% $12,008.65 $11,306.12 $11,210.37 $9,801.27 $9,615.72 Present Value of 5-year Cash Flow (PVCF)= $53,942 The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. … Terminal Value (TV) = FCF2022 × (1 + g) ÷ (r – g) = $16,402 × (1 + 2.5%) ÷ (11.3% – 2.5%) = $190,963 Present Value of Terminal Value (PVTV) = TV / (1 + r)5 = $190,963 / ( 1 + 11.3%)5 = $111,952 The total value, or equity value, is then the sum of the present value of the cash flows, which in this case is $165,895. … NYSE:ORCL Intrinsic Value Mar 19th 18 The assumptions Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows.Simply Wall St - – Full article
Formula Price-Earnings Ratio = Price per share ÷ Earnings per share P/E Calculation for ORCL Price per share = $52.13 Earnings per share = $2.396 ∴ Price-Earnings Ratio = $52.13 ÷ $2.396 = 21.8x On its own, the P/E ratio doesn’t tell you much; however, it becomes extremely useful when you compare it with other similar companies. … For example, if you accidentally compared higher growth firms with ORCL, then ORCL’s P/E would naturally be lower since investors would reward its peers’ higher growth with a higher price. … Alternatively, if you inadvertently compared less risky firms with ORCL, ORCL’s P/E would again be lower since investors would reward its peers’ lower risk with a higher price as well.Simply Wall St - – Full article
When Oracle Corporation (NYSE:ORCL) announced its most recent earnings (30 November 2017), I did two things: looked at its past earnings track record, then look at what is happening in the industry. … To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. … Given that these figures may be relatively nearsighted, I’ve determined an annualized five-year figure for Oracle's net income, which stands at US$9.84B This shows that, generally, Oracle has been able to gradually improve its earnings over the past couple of years as well.Simply Wall St - – Full article
View our latest analysis for Oracle Breaking down ROE — the mother of all ratios Firstly, Return on Equity, or ROE, is simply the percentage of last years’ earning against the book value of shareholders’ equity. … ROE can be split up into three useful ratios: net profit margin, asset turnover, and financial leverage. … This is called the Dupont Formula: Dupont Formula ROE = profit margin × asset turnover × financial leverage ROE = (annual net profit ÷ sales) × (sales ÷ assets) × (assets ÷ shareholders’ equity) ROE = annual net profit ÷ shareholders’ equity NYSE:ORCL Last Perf Feb 16th 18 Essentially, profit margin shows how much money the company makes after paying for all its expenses.Simply Wall St - – Full article
Check out our latest analysis for Oracle How does ORCL’s operating cash flow stack up against its debt? … Additionally, ORCL has generated cash from operations of $14,126.0M over the same time period, resulting in an operating cash to total debt ratio of 24.39%, signalling that ORCL’s current level of operating cash is high enough to cover debt. … Next Steps: At its current level of cash flow coverage, ORCL has room for improvement to better cushion for events which may require debt repayment.Simply Wall St - – Full article
Oracle Corporation develops, manufactures, markets, sells, hosts, and supports application, platform, and infrastructure technologies for information technology (IT) environments worldwide. It provides services in three primary layers of the cloud: Software as a Service, Platform as a Service, and Infrastructure as a Service. The company licenses its Oracle Database software, which enables storage, retrieval, and manipulation of data; and Oracle Fusion Middleware software to build, deploy, secure, access, and integrate business applications, as well as automate their business processes. It also provides software for mobile computing to address the development needs of businesses; Java, a software development language; and big data solutions. In addition, the company offers human capital and talent management, enterprise resource planning, customer experience and customer relationship management, procurement, project portfolio management, supply chain management, business analytics and enterprise performance management, and industry-specific application software, as well as financial management and governance, risk, and compliance applications. Further, it provides Oracle Engineered Systems, servers, storage, industry-specific hardware, management software, and hardware support products, as well as operating systems, and virtualization and other hardware-related software. Additionally, the company offers customers software license updates and product support contracts; database, middleware, and development software, as well as cloud-based platform and infrastructure; and IT strategy alignment, enterprise architecture planning and design, initial software implementation and integration, application development and integration, security assessments, and ongoing software enhancements and upgrade, as well as customer support and education services. The company was founded in 1977 and is headquartered in Redwood City, California.
500 Oracle Parkway,
|Exchange Symbol||Ticker Symbol||Security||Exchange||Country||Currency||Listed on|
|NYSE||ORCL||Common Stock||New York Stock Exchange||US||USD||12. Mar 1986|
|DB||ORC||Common Stock||Deutsche Boerse AG||DE||EUR||12. Mar 1986|
|XTRA||ORC||Common Stock||XETRA Trading Platform||DE||EUR||12. Mar 1986|
|SWX||ORCL||Common Stock||SIX Swiss Exchange||CH||CHF||12. Mar 1986|
|WBAG||ORCL||Common Stock||Wiener Boerse AG||AT||EUR||12. Mar 1986|
|SNSE||ORCL||Common Stock||Santiago Stock Exchange||CL||USD||12. Mar 1986|
|BMV||ORCL *||Common Stock||Bolsa Mexicana de Valores||MX||MXN||12. Mar 1986|
|BOVESPA||ORCL34||BDR EACH REPR 1 COM USD0.01||Bolsa de Valores de Sao Paulo||BR||BRL||29. Dec 2011|
|Area||Date (UTC time)|
|Company Analysis updated:||2018/05/27 09:15|
|End of day share price update:||2018/05/25 00:00|
|Last estimates confirmation:||2018/05/20|
|Last earnings update:||2018/02/28|
|Last annual earnings update:||2017/05/31|
All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.