Can Oracle Corporation (ORCL) Make Its Own Luck?

From different angles

Oracle is currently working on new business propositions, including the cloud, that are going to rattle its CEO’s previous line of thought. The issue with the company is that there is no simple input-output relationship, making it difficult to analyze the stock with defined methods or metrics. I have outlined a few points that investors need to look out for:

A major part of Oracle’s earnings call was focused on software which camouflaged the poor performance of its hardware business. Its hardware system product revenue declined 23% year-over-year. The future still looks bleak with regard to hardware revenue, which, as per management, is expected to grow anywhere between negative 6% and 2% in the next quarter

As mentioned on the earnings call, Oracle Corporation (NASDAQ:ORCL) has partnered with industry leaders and Salesforce.com in order to reshape its cloud computing applications. This combined effort should have positive implications for Oracle’s cloud business besides the presence of its much talked 12c technology.

The decline in share price after the earnings call has made it a reasonable buy when compared to its peers. At a forward P/E of around 9, Oracle is quite cheap than rivals like salesforce.com, inc. (NYSE:CRM)

Is it the time to buy?

While the wheels are turning at Oracle Corporation (NASDAQ:ORCL), management has given out big gifts like doubled dividend and massive buyback to its shareholders for remaining patient and optimistic. The time is ripe to invest in the company because it has massive opportunities in the future and is reasonably cheap.

The article Can Oracle Make Its Own Luck? originally appeared on Fool.com and is written by Mihir Mehta.

Mihir Mehta has no position in any stocks mentioned. The Motley Fool recommends Salesforce.com. The Motley Fool owns shares of Oracle. Mihir is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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