Oracle Corporation (NYSE: ORCL) has confirmed that it will release its fiscal Q2 2022 earnings on Thursday, December 9, 2021, after markets close.
What to look for
Oracle has improved its profitability over the last three years, with earnings per share growing rapidly. For instance, last year, EPS grew to $5.1 from $3.26 per share, representing 56% growth. Investors will be keen to see whether the company continues its exceptional streak of growing EPS and revenue when the cloud giant releases its fiscal Q2 2022 results.
Earnings: Stockearning’s Estimated EPS for fiscal Q2 2022 is expected to grow by 4.7% YoY to $1.11 per share relative to EPS of $0.87 per share on Q1 2022. Historical EPS Performance shows that the company has in the past 12 quarters topped estimates 11 times (91%) and missed EPS estimates once (8%).
Revenue: For fiscal Q2 2022, the company expects revenue of $10.21 billion, representing a 4.2% YoY increase. In the first quarter, the company had total revenue of $9.7 billion, up 4% YoY, with cloud serves and license support revenues growing 6% while cloud license and on-premise license revenues dropping 8%.
Stock movement: Oracle stock has lost 0.7% since the last earnings release. Oracle shares have been DOWN 27 times out of the past 47 quarters following the earnings release. So, the historical price reaction suggests a 57% probability of the share price going DOWN once Oracle releases fiscal Q2 2022 earnings. According to the Stockearning algorithm, the predicted first-day move is 4%, while the predicted move on the seventh day is 5%.
What analysts are saying
Credit Suisse analyst Phil Winslow commenced coverage of Oracle with a "Buy" rating with a price target of $110. Winslow sees the company well-positioned to emerge as the third or fourth-ranked vendor in the PaaS/IaaS market and as the second-ranked SaaS market vendor. In addition, the analyst sees the stock having several advantages within a "down-the-stack" strategy beginning with its massive, entrenched on-premise installed base.
Also, Deutsche Bank analyst Brad Zelnick commenced coverage on Oracle with a “Hold” rating and a target price of $110. While Zelnick believes that the market has "finally appreciating the durability of Oracle's core database franchise, its pole position in cloud financial applications, and optionality in cloud infrastructure,” he considers current reward/risk as properly balanced.
Recently BMO Capital analyst Keith Bachman upgraded the company’s price target from $88 to $100 but maintained a “Hold” rating in the stock following the company’s Q1 2022 earnings report and guidance. The analyst remains bullish in the company’s ERP and HCM but is not convinced regarding the stock’s long-term growth potential in databases but feels the high valuations in software’s increase appeal on ORCL.
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