Is Now The Time To Look At Buying Oracle Corporation (NYSE:ORCL)?

Oracle Corporation (NYSE:ORCL) saw significant share price movement during recent months on the NYSE, rising to highs of US$98.25 and falling to the lows of US$86.17. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Oracle's current trading price of US$90.05 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Oracle’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Oracle

Is Oracle still cheap?

Good news, investors! Oracle is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $135.37, but it is currently trading at US$90.05 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Oracle’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What does the future of Oracle look like?

earnings-and-revenue-growth

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a negative profit growth of -19% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Oracle. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? Although ORCL is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to ORCL, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on ORCL for some time, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. In terms of investment risks, we've identified 2 warning signs with Oracle, and understanding these should be part of your investment process.

If you are no longer interested in Oracle, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.