Oracle Q4 EPS Tops Estimates, Yet Stock Falls 5%

Oracle Corp. (ORCL) reported stronger-than-expected results for the fourth quarter of fiscal 2021. However, following the earnings release, shares of the cloud database company plummeted 4.8% in Tuesday’s extended trading session.

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Oracle reported quarterly revenues of $11.23 billion, a growth of 8% from the prior year. Also, it surpassed the consensus estimate of $11.04 billion.

The company’s increase in revenues can be attributed primarily to the growth witnessed in its cloud services and license support revenues by 8% year-over-year to $7.4 billion.

Moreover, Oracle reported Q4 adjusted EPS of $1.54, which denoted a growth of 29% year-over-year. The company beat the consensus estimate of $1.31.

Oracle CEO Safra Catz said, “Our Q4 performance was absolutely outstanding with total revenue beating guidance by nearly $200 million, and non-GAAP earnings per share beating guidance by $0.24. Our multi-billion dollar Fusion and NetSuite cloud applications businesses saw dramatic increases in their already rapid revenue growth rates: Fusion ERP was up 30% in Q3 and up 46% in Q4, Fusion HCM was up 23% in Q3 and up 35% in Q4, NetSuite was up 24% in Q3 and up 26% in Q4. The accelerating growth rates of both our applications and infrastructure cloud businesses this year drove earnings per share growth up to 21% in FY21. That is the fourth consecutive year of double-digit earnings per share growth at Oracle Corporation.” (See Oracle stock analysis on TipRanks)

Recently, Cowen & Co. analyst Derrick Wood reiterated a Buy rating on the stock with a price target of $85 (4.1% upside potential).

“Our checks are constructive around strength in cloud bookings and we’re expecting a solid quarter. But the bar is lifted as the stock has delivered one of the strongest 3-month performances we’ve seen in a decade,” said Wood.

Consensus among analysts is a Hold based on 2 Buys and 8 Holds. The Oracle average analyst price target stands at $76.10, which implies a potential downside of 6.8% from current levels. Shares have gained 49.5% over the past year.