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Wolfe Research raised its price target on Oracle (NYSE:ORCL) to $215 from $165 on Thursday, while maintaining an Outperform rating following the company’s fourth-quarter results and strong fiscal 2026 guidance. With a market capitalization of $495 billion, Oracle stands as a prominent player in the software industry, though InvestingPro analysis indicates the stock is currently trading above its Fair Value, with analyst targets ranging from $130 to $246.
Oracle reported fourth-quarter revenue of $15.9 billion, representing 11% year-over-year growth and beating expectations by approximately 2%. The outperformance was primarily driven by Cloud License and On-Premise segments, with particular strength in Database License demand, while Infrastructure as a Service (IaaS) grew 52% year-over-year. According to InvestingPro data, Oracle’s trailing twelve-month revenue reached $55.8 billion, with a robust gross profit margin of 71%. For deeper insights into Oracle’s financial health and growth prospects, including 12+ additional ProTips, subscribers can access the comprehensive Pro Research Report.
The company’s remaining performance obligations (RPO) reached $138 billion, up 41% year-over-year, with current RPO growing 19%. Management provided fiscal 2026 RPO guidance projecting growth of over 100% year-over-year to more than $276 billion, which Wolfe Research noted is comparable to Microsoft (NASDAQ:MSFT)’s RPO in fiscal 2024 despite Oracle’s revenue base being a quarter of the size. This ambitious growth outlook has contributed to Oracle’s strong market performance, with the stock delivering a 27% return over the past year.
Oracle guided for fiscal 2026 total cloud growth to exceed 40% year-over-year and cloud infrastructure growth to surpass 70%. The company also expects fiscal 2026 revenue to reach $67 billion, representing 16% year-over-year growth at constant currency, which Wolfe Research suggests would require cloud infrastructure growth closer to the mid-70% range.
Management indicated that capital expenditures are expected to be approximately $25 billion this fiscal year, which Wolfe Research believes will result in another year of negative free cash flow margin, with operating margins likely falling below prior targets to 41.0% in fiscal 2026 and 39.5% in fiscal 2027.
In other recent news, Oracle reported strong financial performance, with revenue reaching $15.9 billion, an 11% increase year-over-year, 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. Oracle raised its fiscal year 2026 revenue guidance to over $67 billion, indicating a 16% year-over-year growth. This guidance was supported by projected Cloud growth of over 40% and Infrastructure growth above 70%.
Several firms have adjusted their price targets for Oracle, reflecting confidence in its growth trajectory. Stifel raised its price target to $180, Evercore ISI to $215, Jefferies to $220, Citizens JMP to $240, and RBC Capital to $195. These adjustments were largely driven by Oracle’s strong cloud growth and increased revenue performance obligations. However, Stifel noted potential challenges due to increased costs and the need for capital to support higher capital expenditures. Despite mixed quarterly results, Jefferies expressed optimism about Oracle’s future prospects, particularly in cloud services and artificial intelligence infrastructure.
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