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On Tuesday, TD Cowen expressed continued confidence in Oracle Corporation (NYSE:ORCL), maintaining a Buy rating and a $210.00 price target on the stock. The firm’s endorsement comes in the wake of Oracle’s reported $33 billion in quarter-over-quarter Remaining Performance Obligations (RPO) build, which notably surpassed last year’s $15 billion and did not yet account for any Stargate contracts. This substantial increase prompted Oracle to revise its fiscal year 2027 growth targets to 20%, exceeding the Street’s expectation of 14%. According to InvestingPro data, Oracle has demonstrated strong financial health with consistent profitability and a robust market position in the software industry, though it currently trades at relatively high earnings and EBITDA multiples.Want deeper insights? InvestingPro offers exclusive access to 13 additional key insights about Oracle, along with comprehensive valuation metrics and financial health scores.
Despite the optimistic outlook on Oracle’s backlog trends and their potential impact on mid-term growth, the company’s third-quarter revenue growth of 8% on a constant currency basis fell short of the anticipated 10%, attributed to fluctuations in AI consumption timing. TD Cowen analysts, however, remain bullish, suggesting that the RPO figures indicate a strong demand environment for Oracle’s offerings. The company’s latest financial metrics show revenue of $54.93 billion over the last twelve months, with a healthy gross profit margin of 71.26%.
Looking ahead to fiscal year 2027, TD Cowen has increased its revenue projections for Oracle while maintaining its earnings per share estimates. The firm’s reiteration of the Buy rating and the $210 price target is based on approximately 28 times the estimated calendar year 2026 earnings per share. InvestingPro analysis reveals that Oracle has maintained dividend payments for 17 consecutive years and has achieved strong returns over the past decade, demonstrating consistent shareholder value creation.Get exclusive access to Oracle’s detailed Pro Research Report, part of InvestingPro’s comprehensive coverage of 1,400+ US stocks, featuring expert analysis and actionable insights.
Oracle’s recent financial performance, marked by the impressive RPO build, reflects the company’s robust sales execution and customer commitment to its cloud services. The increased growth targets set by Oracle underscore the company’s positive trajectory and its potential for sustained expansion in the coming years.
Investors and market watchers will likely monitor Oracle’s progress closely, especially regarding the integration and impact of Stargate contracts on future financial results. Oracle’s ability to continue delivering on its growth promises and to manage the variability in AI consumption will be critical in achieving its revised targets and justifying the confidence placed by analysts like those at TD Cowen.
In other recent news, Oracle Corporation’s fiscal third-quarter results have drawn varied reactions from analysts, primarily due to its revenue growth and future projections. Oracle reported an 8% revenue growth, which fell short of its guidance range of 9-11%. UBS analyst Karl Keirstead adjusted Oracle’s price target to $200 from $210, maintaining a Buy rating, citing the company’s significant deal backlog as a positive indicator. Meanwhile, RBC Capital lowered its price target to $145 from $165, maintaining a Sector Perform rating, and highlighted capacity constraints affecting Oracle’s performance. BMO Capital also reduced its price target from $205 to $175, with a Market Perform rating, noting a positive long-term trajectory despite short-term challenges.
Oppenheimer maintained a Perform rating after observing significant growth in Oracle Cloud Infrastructure and Remaining Performance Obligations. However, they noted that foreign exchange fluctuations and anticipated margin compression could impact future results. BofA Securities cut its price target to $175 from $195, maintaining a Neutral rating, and emphasized the uncertainty surrounding Oracle’s cloud growth and database migration deals. Despite these challenges, Oracle’s management has revised its revenue growth forecast upward for fiscal year 2027, reflecting confidence in the company’s growth trajectory.
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