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Oracle (ORCL) Gains But Lags Market: What You Should Know

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Oracle (ORCL) closed at $95.33 in the latest trading session, marking a +0.05% move from the prior day. The stock lagged the S&P 500's daily gain of 0.75%.

Coming into today, shares of the software maker had gained 9.2% in the past month. In that same time, the Computer and Technology sector lost 2.38%, while the S&P 500 lost 0.05%.

Investors will be hoping for strength from ORCL as it approaches its next earnings release. In that report, analysts expect ORCL to post earnings of $1.11 per share. This would mark year-over-year growth of 4.72%. Meanwhile, our latest consensus estimate is calling for revenue of $10.21 billion, up 4.2% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.65 per share and revenue of $42.23 billion, which would represent changes of -0.43% and +4.32%, respectively, from the prior year.

Any recent changes to analyst estimates for ORCL should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.18% lower within the past month. ORCL is currently a Zacks Rank #4 (Sell).

In terms of valuation, ORCL is currently trading at a Forward P/E ratio of 20.47. Its industry sports an average Forward P/E of 35.02, so we one might conclude that ORCL is trading at a discount comparatively.

Also, we should mention that ORCL has a PEG ratio of 2.41. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Software industry currently had an average PEG ratio of 2.98 as of yesterday's close.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 163, putting it in the bottom 36% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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