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On Tuesday, DA Davidson reiterated a neutral rating on Oracle Corporation (NYSE:ORCL) with a steady price target of $150.00, close to the current trading price of $148.79. According to InvestingPro data, Oracle appears to be trading above its Fair Value, with analysts setting targets ranging from $130 to $227. The decision followed Oracle’s third-quarter fiscal year 2024 earnings report, which highlighted a shortfall in reaching revenue expectations, with last twelve months revenue growth at 6.4%. This was interpreted as a sign of decelerating growth, excluding the company’s Oracle Cloud Infrastructure (OCI).
Oracle’s recent earnings release revealed a mixed performance, with the company missing its top-line revenue goals. This has been an indicator of potential slowing growth beyond the contributions from OCI. Despite this setback, Oracle’s management team expressed a confident outlook for the future. They anticipate a 15% revenue increase in the upcoming fiscal year, significantly higher than the current 6.4% growth rate. This optimism is supported by the planned doubling of Oracle’s data center capacity and the expected contributions from new Stargate contracts. InvestingPro subscribers can access 12+ additional investment tips and a comprehensive Pro Research Report for deeper insights into Oracle’s growth prospects.
The analyst from DA Davidson underscored Oracle’s stable outlook, conveyed by the management’s positive stance on the company’s growth prospects. With a market capitalization of $416 billion and an overall Financial Health Score of "GOOD" according to InvestingPro, Oracle maintains a strong position in the market. The anticipated expansion of data center operations and the initiation of Stargate contracts are central to the company’s strategy for driving revenue growth in the next fiscal year.
Oracle’s management has conveyed their expectations of delivering a robust 15% revenue growth in the forthcoming fiscal year. This projected growth is attributed to strategic initiatives, including the expansion of data center capacity and the commencement of revenue generation from Stargate contracts.
In conclusion, DA Davidson’s reaffirmation of a neutral rating and $150 price target on Oracle stock reflects a cautious but stable perspective on the company’s value, given the recent earnings and the management’s positive revenue growth forecast for the next fiscal year.
In other recent news, Oracle Corporation reported mixed financial results for its recent fiscal quarter. The company’s revenue came in at $14.13 billion, which was below the consensus forecast of $14.39 billion, marking a 6% year-over-year increase. Earnings per share (EPS) also fell short, reported at $1.47 against the expected $1.49. Despite these misses, Oracle’s Remaining Performance Obligations (RPO) reached $130 billion, significantly surpassing estimates and highlighting strong demand for its cloud services.
Analysts have reacted differently to these developments. Evercore ISI adjusted their outlook by lowering the price target to $185 but maintained an Outperform rating, while JMP Securities sustained an Underperform rating with a $205 target. KeyBanc Capital Markets maintained an Overweight rating and a $200 target, expressing optimism about Oracle’s future growth, particularly with its cloud infrastructure and AI initiatives. Oracle’s cloud revenue continues to grow, with a 25% year-over-year increase, reaching $6.2 billion. The company has also announced significant AI infrastructure expansions through partnerships with NVIDIA (NASDAQ:NVDA) and AMD (NASDAQ:AMD), underscoring its strategic focus on AI and cloud services.
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