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

In the latest trading session, Oracle (ORCL) closed at $74.97, marking a +0.13% move from the previous day. The stock lagged the S&P 500’s daily gain of 1.09%.

Prior to today’s trading, shares of the software maker had gained 9.09% over the past month. This has outpaced the Computer and Technology sector’s gain of 6.99% and the S&P 500’s gain of 5.05% in that time.

Investors will be hoping for strength from ORCL as it approaches its next earnings release. On that day, ORCL is projected to report earnings of $1.31 per share, which would represent year-over-year growth of 9.17%. Our most recent consensus estimate is calling for quarterly revenue of $11.07 billion, up 6.01% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.46 per share and revenue of $40.32 billion, which would represent changes of +15.84% and +3.2%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for ORCL. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 remained stagnant within the past month. ORCL currently has a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that ORCL has a Forward P/E ratio of 16.8 right now. For comparison, its industry has an average Forward P/E of 40.35, which means ORCL is trading at a discount to the group.

We can also see that ORCL currently has a PEG ratio of 1.98. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. The Computer – Software was holding an average PEG ratio of 2.7 at yesterday’s closing price.

The Computer – Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 104, which puts it in the top 41% 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.

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