Oracle Earnings Preview: All Eyes Are on the Operating Margin

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Microsoft Corporation Notícia

Oracle Corporation,Cerner Corp

Stocks Analysis by Brian Gilmartin covering: Microsoft Corporation, Oracle Corporation, Cerner Corp. Read Brian Gilmartin's latest article on Investing.com

) the former enterprise software database giant that has had to transition to the cloud in the last 10 – 15 years and is now forced to tackle the AI evolution, is scheduled to report their fiscal Q4 ’24 financial results after the closing bell on Tuesday, June 11, 2024.

When Oracle reported their fiscal Q3 ’24 in March ’24, they reported a very strong quarter: revenue rose 7%, operating income grew +12%, and EPS grew +16%. Oracle Cloud Infrastructure backlog grew 29% yoy, and the RPO grew 29% as well to $80 billion.The EPS and Revenue Revisions Continue To Be Positive:An Oracle trade through $130 – $133 would be a break out to a new all-time-high.

Oracle’s biggest challenge is that it remains well behind Amazon’s AWS and Microsoft’s Azure in the secular growth of cloud. Morningstar carries a 30% free-cash-flow yield target for Oracle, which I found surprising since the internal valuation spreadsheet of this blog , is between 4% – 8% over long periods of time. Only if Oracle free-cash-flow is divided by revenue, do I get anything close to a 30% FCF yield target.

 

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