Oracle Stock Fell Despite Good Q3 Growth and a “Long Runway” According to an Analyst

Oracle Stock

Oracle Stock (NYSE:ORCL)

Oracle (NYSE:ORCL) is scheduled to release its financial results for the fiscal third quarter on Thursday. Investment company Monness, Crespi, Hardt has said that it anticipates robust growth for Oracle in the fiscal third quarter and a “large runway” for future development.

Analyst Brian White, who has a buy recommendation on shares of Oracle, anticipates revenue of $12.44 billion, an increase of 18% year-over-year and slightly higher than the forecast of $12.43 billion. Nevertheless, since the business completed the purchase of Cerner in June 2022, this number will be considerably skewed, making it difficult to accurately compare the current and previous years.

In an investor letter, White said, “In our opinion, no firm is immune to an economic downturn; nevertheless, we think the tailwind of the Oracle Cloud and the Oracle stock moderate valuation offer some downside protection.”

Most market watchers believe that Oracle will post an adjusted profit of $1.20 per share on sales of $12.42 billion.

As a further point of interest, White said that Oracle anticipates overall organic cloud sales growth for fiscal 2023 to be more than 30% as the firm continues to win new business. Oracle, on the other hand, has had faster growth patterns in recent quarters, while some of its rivals have seen slower growth trends. This may make Oracle an anomaly.

White noted, “The deal momentum in Oracle’s cloud business has shown up in leading indications such as organic [remaining performance obligations that dramatically accelerated to 28% constant currency] growth in [fiscal second-quarter] from 22% in [fiscal first-quarter] and 11% a year before.” This increase is counterintuitive, given that the RPO growth patterns of other software companies have been decelerating.

In the future, White anticipates that Oracle will see a “seasonal” fourth quarter, with sales predicted to increase by 15% year-over-year to $13.65 billion and adjusted profits of $1.56 per share.

Oracle stock said it had secured a multi-year cloud cooperation agreement with Uber late last month.

Featured Image: Unsplash @ BoliviaInteligente

Please See Disclaimer

About the author: I'm a financial journalist with more than 1.5 years of experience. I have worked for different financial companies and covered stocks listed on ASX, NYSE, NASDAQ, etc. I have a degree in marketing from Bahria University Islamabad Campus (BUIC), Pakistan.