Oracle Corporation (NYSE:ORCL) Analysts Are Pretty Bullish On The Stock After Recent Results

Shareholders of Oracle Corporation (NYSE:ORCL) will be pleased this week, given that the stock price is up 13% to US$140 following its latest yearly results. It looks like the results were a bit of a negative overall. While revenues of US$53b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.0% to hit US$3.71 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Oracle

Taking into account the latest results, the current consensus from Oracle's 29 analysts is for revenues of US$57.9b in 2025. This would reflect a decent 9.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 16% to US$4.41. Before this earnings report, the analysts had been forecasting revenues of US$57.8b and earnings per share (EPS) of US$4.45 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The consensus price target rose 5.6% to US$145despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Oracle's earnings by assigning a price premium. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Oracle at US$175 per share, while the most bearish prices it at US$98.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Oracle shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Oracle's growth to accelerate, with the forecast 9.3% annualised growth to the end of 2025 ranking favourably alongside historical growth of 6.9% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Oracle is expected to grow slower than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Oracle's revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Oracle analysts - going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Oracle that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com