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Oracle Corporation (NYSE:ORCL) Analysts Are Pretty Bullish On The Stock After Recent Results

Shareholders of Oracle Corporation (NYSE:ORCL) will be pleased this week, given that the stock price is up 13% to US$140 following its latest yearly results. Revenues of US$53b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$3.71, missing estimates by 2.0%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Oracle

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Following the latest results, Oracle's 29 analysts are now forecasting revenues of US$57.9b in 2025. This would be a decent 9.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 16% to US$4.41. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$57.8b and earnings per share (EPS) of US$4.45 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

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With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 5.6% to US$145. It looks as though they previously had some doubts over whether the business would live up to their expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Oracle, with the most bullish analyst valuing it at US$175 and the most bearish at US$98.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 9.3% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 6.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 12% 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Oracle's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Oracle. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Oracle analysts - going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Oracle you should know about.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com