Oracle Corporation (NYSE:ORCL) will report fourth-quarter financial results after the market closes today. Mizuho Securities analyst Siti Panigrahi remains upbeat on ORCL stock ahead of the Q4 earnings print and expects the technology company to exceed Wall Street’s consensus estimates.
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In a note dated June 8, Panigrahi said that he expects ORCL’s Q4 numbers to come ahead of the consensus, led by strength in its Cloud business. The analyst added that despite macro weakness, the demand for back-office applications remains robust with solid cloud migration.
Furthermore, the analyst expects Oracle Cloud Infrastructure, or OCI to benefit from the emergence of AI (Artificial Intelligence). He highlighted that several AI-based start-ups “have turned to OCI as the underlying infrastructure for building and training their LLMs (Large Language Models).”
Oracle Stock Performance
It’s worth highlighting that Cloud revenues have been driving Oracle’s total sales and earnings. During the Q3 conference call, ORCL’s management said that the company’s Q4 revenues (including Cerner- it acquired Cerner last year in June) are expected to grow by 17% to 19% on a constant currency basis. Further, the total Cloud segment is likely to grow by 51% to 53%. Excluding Cerner, the Cloud business could increase by more than 30%.
Given the momentum in its Cloud division, Wall Street expects Oracle to post revenues of $13.74 billion, up about 16% year-over-year. Meanwhile, analysts expect the company to post earnings of $1.58 per share in Q4, compared to $1.54 in the prior-year quarter.
Is Oracle Stock Expected to Rise?
Oracle stock has gained over 35% year-to-date. Despite the recent gains, Panigrahi believes that ORCL stock offers a “strong risk-reward profile,” led by an expected acceleration in growth rate and AI exposure.
ORCL stock has received 12 Buys and four Holds for a Strong Buy consensus rating. Analysts’ average price target of $116.67 implies 6.21% upside potential from current levels.
Investors should note that Mark Moerdler of Bernstein is the most accurate analyst for ORCL stock, according to TipRanks. Copying Moerdler’s trades on ORCL stock and holding each position for one year could result in 95% of your transactions generating a profit, with an average return of 20.33% per trade.
