JMP Analyst Patrick Walravens maintained a market perform rating Oracle Corp ORCL after attending Oracle CloudWorld 2022, the company’s user conference in Las Vegas, Nevada, which also hosted a financial analysts’ meeting, and after the stock is down ~21% year-to-date while the Nasdaq is down ~32%.
Walravens’ due diligence with partners and customers shows how their customers have reacted to the uncertain macroeconomic environment. He received comments like: “Every company tries to cut costs.
The analyst asked seven customers about their expected spend on Oracle over the next 12 months. Noting that companies are prioritizing migration to the cloud, he was positive about Oracle Cloud Infrastructure (OCI) Gen 2.
Walravens heard that Oracle’s supply chain solutions are “selling well” and that the company is making “a foray” into manufacturing.
Its due diligence indicates that Oracle HCM has improved significantly over the past three years. It’s gotten a lot better.” They also welcomed the $28.3 billion acquisition of Oracle.
Regarding the financial analysts meeting, his takeaways include Oracle’s financial targets for FY26.
Goals included total revenue of $65 billion, non-GAAP operating margin of about 45%, and annual non-GAAP EPS growth of over 10%, with cloud expected to account for about 30% of revenue in FY23 will, up from about 20% of sales in the previous year FY20.
Walravens increased its non-GAAP EPS estimates for fiscal 23, 24 and 25 above consensus. He said Oracle is fairly valued.
KeyBanc Analyst Michael Turits upgraded Oracle from a sector weight to overweight $80 price target.
Oracle’s 2022 analyst day has pointed the way to mid-40s margins and multi-year high-single-digit revenue growth, allaying some concerns about the risks surrounding the Cerner acquisition.
Deutsche Bank Analyst Brad Zelnick raised the company’s target price on Oracle to $120 from $110 and reiterated a buy. The key takeaway is that Oracle’s public cloud “is very real and is showing accelerated revenue growth with…
