Oracle: Safe Tech Bet In A Volatile Market

seekingalpha04-18

Oracle is a large-cap, value-oriented tech stock that offers upside potential while maintaining a margin of safety in a volatile market.The company has a broad product portfolio, including front-end ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2428564434?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/171294959/image_171294959.jpg","is_english":true,"pubTime":"2024-04-18 19:21","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2428564434","market":"hk","top_or_hot":-1,"title":"Oracle: Safe Tech Bet In A Volatile Market","media":"seekingalpha","content":"<div>\n<p>Oracle is a large-cap, value-oriented tech stock that offers upside potential while maintaining a margin of safety in a volatile market.The company has a broad product portfolio, including front-end ...</p>\n\n<a href=\"https://seekingalpha.com/article/4684404-oracle-stock-safe-tech-bet-in-a-volatile-market\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Oracle: Safe Tech Bet In A Volatile Market</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nOracle: Safe Tech Bet In A Volatile Market\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-18 19:21 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4684404-oracle-stock-safe-tech-bet-in-a-volatile-market><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Oracle is a large-cap, value-oriented tech stock that offers upside potential while maintaining a margin of safety in a volatile market.The company has a broad product portfolio, including front-end ...</p>\n\n<a href=\"https://seekingalpha.com/article/4684404-oracle-stock-safe-tech-bet-in-a-volatile-market\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"IE00BBT3K403.USD","symbol_name":"LEGG MASON CLEARBRIDGE TACTICAL DIVIDEND INCOME \"A(USD) ACC","start_time":0,"source_url":"https://seekingalpha.com/article/4684404-oracle-stock-safe-tech-bet-in-a-volatile-market","article_id":"2428564434","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/171294959/image_171294959.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2428564434","pubTimestamp":1713439305,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Oracle is a large-cap, value-oriented tech stock that offers upside potential while maintaining a margin of safety in a volatile market.The company has a broad product portfolio, including front-end applications and back-end infrastructure, and is making advancements in AI and healthcare.ORCL has a well-oiled sales machine, strong margins, and a track record of capital returns, making it an attractive investment option.Its current 19x forward P/E is reasonably valued against the broader market, especially given double-digit EPS growth.   JasonDoiy Watching the markets whipsaw over the past week on the latest U.S. inflation readings and updated expectations over the pace of interest rate increases, a number of investors are thinking the same thing: how can I position my portfolio for upside while still maintaining a margin of safety in a very volatile environment?","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"IE00BBT3K403.USD":"LEGG MASON CLEARBRIDGE TACTICAL DIVIDEND INCOME \"A(USD) ACC","IE00BMPRXN33.USD":"NEUBERGER BERMAN 5G CONNECTIVITY \"A\" (USD) ACC","IE00BMPRXR70.SGD":"Neuberger Berman 5G Connectivity A Acc SGD-H","LU0109392836.USD":"富兰克林科技股A","IE00B7SZLL34.SGD":"Legg Mason ClearBridge - Value A Acc SGD-H","LU0965509010.AUD":"AB LOW VOLATILITY EQUITY PORTFOLIO \"AD\" (AUDHDG) INC","BK4528":"SaaS概念","LU0320765489.SGD":"FTIF - Franklin Mutual US Value A Acc SGD","LU0175139822.USD":"AB FCP I Global Equity Blend A USD","LU1489326972.SGD":"First Eagle Amundi International AHS-MD SGD-H","BK4516":"特朗普概念","LU0130102774.USD":"Natixis Harris Associates US Equity RA USD","LU0070302665.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) ACC","LU1935043023.USD":"MANULIFE GF GLOBAL MULTI-ASSET DIVERSIFIED INCOME \"AA\" (USD) INC A","LU0949170772.SGD":"Blackrock Global Equity Income A6 SGD-H","LU2326559502.SGD":"Natixis Loomis Sayles US Growth Equity P/A SGD-H","LU0648001328.SGD":"Natixis Harris Associates US Equity RA SGD","LU0965509283.SGD":"AB LOW VOLATILITY EQUITY PORTFOLIO \"AD\" (SGDHDG) INC","LU0861579265.USD":"联博低波幅策略股票基金A","BK4585":"ETF&股票定投概念","IE0002270589.USD":"LEGG MASON CLEARBRIDGE VALUE \"A\" (USD) INC","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","LU0985489474.SGD":"First Eagle Amundi International AHS-C SGD-H","LU0878866978.SGD":"First Eagle Amundi International AHS-QD SGD-H","LU0738911758.USD":"Blackrock Global Equity Income A6 USD","LU0256863811.USD":"ALLIANZ US EQUITY \"A\" INC","ORCL":"甲骨文","LU1201861249.SGD":"Natixis Harris Associates US Equity PA SGD-H","LU0965509101.SGD":"AB LOW VOLATILITY EQUITY PORTFOLIO \"A\" (SGDHDG) ACC","LU0433182093.SGD":"First Eagle Amundi International AS-C SGD","BK4538":"云计算","LU0980610538.SGD":"Natixis Harris Associates US Equity RA SGD-H","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","IE00BLSP4452.SGD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis SGD-H Plus","IE00BLSP4239.USD":"Legg Mason ClearBridge - Tactical Dividend Income A Mdis USD Plus","BK4588":"碎股","LU0068578508.USD":"First Eagle Amundi International Cl AU-C USD","LU1429558221.USD":"Natixis Loomis Sayles US Growth Equity RA USD","LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","IE00B19Z3581.USD":"Legg Mason ClearBridge - Value A Acc USD","LU1435385759.SGD":"Natixis Loomis Sayles US Growth Equity RA SGD-H","LU0082616367.USD":"摩根大通美国科技A（dist）","LU0889565833.HKD":"FRANKLIN TECHNOLOGY \"A\" (HKD) ACC","LU1935043536.SGD":"MANULIFE GF GLOBAL MULTI-ASSET DIVERSIFIED INCOME \"AA\" (SGDHDG) INC A","BK4097":"系统软件","LU0208291251.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) INC","BK4581":"高盛持仓","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","LU1803068979.SGD":"FTIF - Franklin Technology A (acc) SGD-H1","IE00B19Z3B42.SGD":"Legg Mason ClearBridge - Value A Acc SGD"},"translate_title":"甲骨文：动荡市场中的安全科技赌注","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ORCL":1},"content_text":"Oracle is a large-cap, value-oriented tech stock that offers upside potential while maintaining a margin of safety in a volatile market.The company has a broad product portfolio, including front-end applications and back-end infrastructure, and is making advancements in AI and healthcare.ORCL has a well-oiled sales machine, strong margins, and a track record of capital returns, making it an attractive investment option.Its current 19x forward P/E is reasonably valued against the broader market, especially given double-digit EPS growth.   JasonDoiy Watching the markets whipsaw over the past week on the latest U.S. inflation readings and updated expectations over the pace of interest rate increases, a number of investors are thinking the same thing: how can I position my portfolio for upside while still maintaining a margin of safety in a very volatile environment? Large cap, value-oriented tech stocks that aren't trading at nosebleed valuation multiples can be part of the answer, and Oracle (NYSE:ORCL) fits the bill well here. The software giant, originally best known for its database products and now a global brand spanning both front-end and back-end applications, has seen its share price rise ~16% this year, but shares have cooled off over the past month after a well-received fiscal Q3 (February quarter) earnings print. Data by YCharts I'm bullish on Oracle. Though the company has frequently been lambasted for lagging its peers in adopting key technologies like the cloud, Oracle isn't behind in AI - where it has been pushing AI-driven automation features in its database products for years. Oracle also maintains a well-oiled sales practice that has install base customers around the world in a variety of software products, with a very greenfield opportunity for cross-sales. Here is my longer-term bull case for Oracle:   Oracle has among the broadest product portfolios of any company in the software industry. Oracle now has a full suite of front-end applications covering functions such as supply chain, finance, HR, sales - everything under the sun. The company has also retained its traditional strength in backend infrastructure, with products like the Oracle Autonomous Database.  Key vertical opportunity in healthcare/Cerner. Medical records have long been one of the bastions that tech has so far failed to disrupt. Larry Ellison, Oracle's founder and now Chairman/CTO, is personally throwing his weight behind adapting the company's products (bolstered by a massive Cerner acquisition in 2022) and adding in AI functionalities.  Well oiled sales machine. Oracle essentially invented the sales playbook in Silicon Valley. Its late co-CEO, Mark Hurd, is often credited with institutionalizing the position of a \"business development representative\", the cold-calling army that now represents among the most common entry-level positions in the industry. Oracle has among the best-oiled sales processes in enterprise technology, and continues to leverage that playbook to grow its business.  Rich margin profile. Oracle has long boasted 80%+ gross margins and ~30% operating margins, the result of a massive software install base that drives recurring revenue for little incremental effort.  Capital returns. Oracle pays a consistent dividend and is also a regular repurchaser of its stock, making use of its generous free cash flows to boost shareholder returns.  In spite of these strengths, while Oracle isn't wholly cheap by any standards, it's also not sitting at egregious valuation multiples like most of its large-cap tech peers. For next fiscal year FY25 (the year for Oracle ending in May 2025), Wall Street analysts are projecting the company to generate $57.7 billion in revenue (+8% y/y) and $6.23 in pro forma EPS, up 11% from FY24 expectations. Considering Oracle's sheer number of growth opportunities and broad product portfolio, rich margin profile that allows for ample scalability, and deep install base, I'd say the stock's 19x FY25 P/E ratio is very reasonable, especially considering the fact that we're seeing high-teens EPS growth at the moment. Oracle isn't a stock that you have to buy and lose sleep over: it's a dependable growth name, and even if its most exciting days are behind it, it still has a number of key catalysts (such as expansion in healthcare/revolutionizing medical records) that can drive renewed strength. Buy this recent dip with confidence. Q3 download Let's now go through Oracle's latest quarterly results in greater detail. The Q3 earnings summary is shown below:   Oracle Q3 results (Oracle Q3 earnings release) Oracle's revenue grew 7% y/y to $13.28 billion, which accelerated over 5% y/y growth in Q2. One of the company's biggest drivers to growth is Oracle Cloud Infrastructure, or OCI - which is Oracle's cloud platform and homegrown competitor to AWS. Management cites that despite competitors' dominance in the market, many customers are choosing to go with OCI for lower total cost of ownership as well as access to Oracle's well-known technical support teams. This is shown in total infrastructure (IaaS) revenue up 49% y/y in the quarter to $1.8 billion. Total cloud revenue, including SaaS (+14% y/y), meanwhile, grew 26% y/y. Management notes that this Q3 is the first quarter in Oracle's history in which the scale of its cloud revenue finally surpassed its on-premise license revenue. Oracle is also extending its traditional database strength into the cloud. Cloud database revenue grew 34% y/y, and now has ARR of $1.9b billion. It's important to note that at the moment, Oracle is over-invested into capacity, as it's expecting significant growth in cloud infrastructure sales: so over time, as more customers fill available capacity, the company's gross margin will expand. Per CEO Safra Catz's remarks on the Q3 earnings call:  Database subscription revenues, which include database license support were up 5%. And highlighted by cloud database services, which were up 34% and now has annualized revenue of $1.9 billion. Very importantly, has on-premise databases migrate to the cloud, we expect these cloud database services will be the third leg of revenue growth alongside strategic SaaS and OCI [...] While we continue to build data center capacity, overall gross margins will go higher as more of our cloud regions fill up. We monitor these expenses carefully to ensure gross margin percentages expand as we scale. And to that point, gross profit dollars of Cloud Services and License Support grew 8% in Q3.\"  From a profitability standpoint, pro forma gross margins expanded 2 points y/y to 42% (while GAAP margins rose also rose 2 points to 28%), driven by continued opex efficiencies and economies of scale in cloud services. Pro forma EPS, meanwhile, also soared 16% y/y to $1.41, ahead of Wall Street's $1.38 consensus for the quarter. Key takeaways  With a number of growth drivers across products (especially infrastructure and database services) and verticals (particularly healthcare), a long history of consistent profits and shareholder returns, and a decently reasonable valuation, I think Oracle is a great safe buy in a choppy market environment. Stay long here and buy the recent dip.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2428564434"}