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Stifel raised its price target on Oracle (NYSE:ORCL) to $180 from $150 on Thursday, while maintaining a Hold rating on the stock following the company’s quarterly earnings report. According to InvestingPro data, Oracle, currently trading at a P/E ratio of 40.4, appears overvalued relative to its Fair Value assessment.
The technology giant, with a substantial market capitalization of $494.6 billion and annual revenue of $55.8 billion, posted results that exceeded the high end of its constant currency guidance, with particularly strong performance in Oracle Cloud Infrastructure (OCI), which grew 62% year-over-year, and a reacceleration in Software-as-a-Service (SaaS) growth.
Based on its solid pipeline and remaining performance obligation (RPO) visibility, Oracle management raised its fiscal year 2026 revenue guidance to more than $67 billion, representing approximately 16% year-over-year growth in constant currency, up from the previous forecast of $66 billion.
The company expects its Total (EPA:TTEF) Cloud and Cloud Infrastructure-as-a-Service (IaaS) revenue growth to accelerate in fiscal year 2026 to 40% and 70% year-over-year, respectively, with RPO growth projected to exceed 100% during the same period.
Stifel noted that while Oracle’s growth acceleration is positive, it comes with increased costs as operating income growth will likely lag revenue growth in coming quarters, and the company may need to raise capital to fund higher capital expenditure requirements, potentially limiting multiple expansion. With a robust gross profit margin of 71.1%, InvestingPro subscribers can access 12+ additional key metrics and valuation insights in the comprehensive Pro Research Report, essential for understanding Oracle’s full financial picture.
In other recent news, Oracle reported impressive financial results, with revenue reaching $15.9 billion, an 11% year-over-year increase, surpassing both Evercore’s estimate of $15.4 billion and the Street consensus of $15.6 billion. The company’s earnings per share were $1.70, exceeding analyst expectations of $1.63 to $1.64. Management has raised its fiscal year 2026 revenue target to $67 billion, indicating a 16% year-over-year growth, and projected further growth exceeding 20% in fiscal year 2027. Analyst firms such as Evercore ISI, Jefferies, Citizens JMP, and RBC Capital have responded by raising their price targets for Oracle, citing strong cloud growth and financial performance. Evercore ISI increased its target to $215, Jefferies to $220, Citizens JMP to $240, and RBC Capital to $195. Jefferies noted Oracle’s 41% growth in revenue performance obligations and the potential for future revenue conversion. Mizuho (NYSE:MFG) reiterated its Outperform rating, highlighting Oracle’s double-digit organic revenue growth milestone, driven by cloud infrastructure and SaaS offerings. Oracle’s Infrastructure as a Service (IaaS) and Software (ETR:SOWGn) as a Service (SaaS) businesses also showed significant growth, with IaaS increasing by 52% year-over-year and SaaS by 13%.
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