Now May Be The Time To Buy Oracle Corporation

With a stock price of $36.19 as of writing, the company trades at an attractive P/E multiple of 16.2x & P/CF of 12.2x, which is much better than most peers’ P/E & P/CF multiples. Microsoft Corporation (NASDAQ:MSFT) trades at 29.1x & 19.2x, Adobe Systems Incorporated (NASDAQ:ADBE) 107x & 56.8x, SAP (SAP SE) 17.38x & 16.9x, and Intuit Inc. (NASDAQ:INTU) 60x & 37x, respective to P/E and P/CF each. Margins at the operating level (36%) & net level (26%) too stand high when compared to peers: Microsoft 29% & 13%, Adobe Systems 17% & 13%, SAP SE 21% & 10%, and Intuit 21% & 9%. Oracle’s 10 year median P/E stands at 19.5x, with minimum & maximum at 13x & 28.8x. The industry’s average P/E stands at 20.5. As earnings pick-up & investors start perceiving the stock as a growth stock from the present value stock attribution, I expect the P/E to rise slightly to 17x more in-line with its median P/E & closer to the industry average.

With expected increment in earnings, and likely expansion in P/E, stock price target of $44-$45 is highly achievable in my opinion in a span of 8-10 months. Also, 12 of 15 renowned research firms, including JP Morgan & Barclays, listed on Nasdaq website, indicate a Strong buy on the stock.

Disclosure: The author has no positions in Oracle or other securities mentioned in the article.