Oracle Corporation (NYSE:ORCL) Released Earnings Last Week And Analysts Lifted Their Price Target To US$196

Oracle Corporation (NYSE:ORCL) shareholders are probably feeling a little disappointed, since its shares fell 5.1% to US$179 in the week after its latest second-quarter results. The result was positive overall - although revenues of US$14b were in line with what the analysts predicted, Oracle surprised by delivering a statutory profit of US$1.10 per share, modestly greater than expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Oracle

After the latest results, the 34 analysts covering Oracle are now predicting revenues of US$57.7b in 2025. If met, this would reflect an okay 5.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 9.9% to US$4.57. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$58.1b and earnings per share (EPS) of US$4.61 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The consensus price target rose 6.7% to US$196despite 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. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Oracle, with the most bullish analyst valuing it at US$220 and the most bearish at US$140 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Oracle's past performance and to peers in the same industry. It's clear from the latest estimates that Oracle's rate of growth is expected to accelerate meaningfully, with the forecast 10% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 7.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 13% annually. So it's clear that despite the acceleration in growth, Oracle is expected to grow meaningfully slower than the industry average.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Oracle going out to 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Oracle that you need to be mindful 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.