Stock Analysis

At US$83.03, Is Oracle Corporation (NYSE:ORCL) Worth Looking At Closely?

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NYSE:ORCL
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Let's talk about the popular Oracle Corporation (NYSE:ORCL). The company's shares received a lot of attention from a substantial price increase on the NYSE over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today I will analyse the most recent data on Oracle’s outlook and valuation to see if the opportunity still exists.

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What's The Opportunity In Oracle?

Good news, investors! Oracle is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $117.18, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Oracle’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Oracle generate?

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NYSE:ORCL Earnings and Revenue Growth December 1st 2022

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to more than double over the next couple of years, the future seems bright for Oracle. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? Since ORCL is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on ORCL for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ORCL. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For instance, we've identified 4 warning signs for Oracle (2 make us uncomfortable) you should be familiar with.

If you are no longer interested in Oracle, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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