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Oracle Corp ORCL

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Oracle Begins Fiscal 2022 With a Mixed Quarter As Cloud Shines; Maintain $65 FVE; Shares Overvalued

Julie Bhusal Sharma Equity Analyst

Analyst Note

| Julie Bhusal Sharma |

Oracle kicked off fiscal 2022 with a mixed quarter, with the top line finishing below our estimates and the bottom line finishing above them. The company’s cloud business continues to perform well and grow as a portion of Oracle’s overall sales. Since the cloud business typically offers better margins than the firm’s on-premises business, we view this mix shift positively as the increasing cloud mix will help the company grow its profitability. At the same time, however, we remain aware of the intense competition in the database management market and maintain our fair value estimate of $65 per share. With shares trading around $87, we recommend waiting for a pullback before committing capital to the narrow-moat name.

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Company Profile

Business Description

Oracle provides database technology and enterprise resource planning, or ERP, software to enterprises around the world. Founded in 1977, Oracle pioneered the first commercial SQL-based relational database management system. Today, Oracle has 430,000 customers in 175 countries, supported by its base of 136,000 employees.

Contact
2300 Oracle Way
Austin, TX, 78741
T +1 737 867-1000
Sector Technology
Industry Software - Infrastructure
Most Recent Earnings Aug 31, 2021
Fiscal Year End May 31, 2022
Stock Type Slow Growth
Employees 132,000

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