Should You Hold Oracle (ORCL)?

[View in browser]( [The Spill Logo] BROUGHT TO YOU BY: [Logo]( Proprietary Data Insights Financial Pros’ Top Infrastructure Software Stock Searches in the Last Month Rank Ticker Name Searches #1 [ORCL]( Oracle Corp 37 #2 [MSFT]( Microsoft Corp 37 #3 [DELL]( Dell Technologies Inc 37 #4 [ZS]( Zscaler Inc 19 #5 [PANW]( Palo Alto Networks Inc 14 #ad [Adding Color to the Investment Spectrum]( Brought to you by [Behind the Markets]( [Three Overlooked AI Stocks Set to Soar]( [Behind the Markets - Three Overlooked AI Stocks Set to Soar]( Your Second Chance to Profit from AI If you missed out on Nvidia, don't worry. A 244-year-old pattern is about to trigger a $25.6 trillion AI surge... …That could send three overlooked stocks soaring 1,000%+ [Get my new research on all three plays right now.]( Oracle's (ORCL) Cloud Soars: 10% Stock Jump, but Is It a Buy? Markets loved what they heard from Oracle (ORCL) this week, sending the stock up over 10% after the company announced earnings. The company topped estimates on earnings and revenues, turning the heads of financial pros, according to our TrackStar data. Oracle quickly saw as many searches as Microsoft, with investors keying in on new partnerships with Amazon Web Services and Google Cloud. Plus, Larry Ellison’s investments in large Nvidia GPU clusters have started to pay off. Yet, with the company trading at 31x forward earnings and 18x forward operating cash flow, does this tech behemoth deserve your cash? Oracle’s Business In the digital age, Oracle reigns as the database king. This tech titan has morphed from a software giant into a cloud computing powerhouse, reshaping how businesses harness data. Oracle's tentacles reach far and wide. It arms 430,000 customers across 175 countries with arsenal of cloud apps, databases, and engineered systems. From Fortune 500 juggernauts to scrappy startups, Oracle's tech keeps the business world spinning. Oracle's revenue streams flow from four key channels: - Cloud services and license support (79% of total revenues) - The cloud cash cow, milking subscriptions and support fees - Cloud license and on-premise license (7%) - Old-school software licenses for cloud and earthbound systems - Hardware (5%) - Beefy servers, storage, and industry-specific gadgetry - Services (9%) - Brain power for hire: consulting, premium support, and tech education Oracle just flexed its financial muscles, posting a beefy 7% revenue jump to $13.3 billion. Cloud services surged 21%, proving Oracle's bet on the cloud is paying off big time. AI fever has gripped Oracle too. The company inked 42 cloud GPU deals worth a cool $3 billion, signaling an AI gold rush in enterprise tech. With 162 data centers globally and more under construction, Oracle's building a cloud empire that's ready to rain data on demand. Financials [Financials] Source: Stock Analysis Oracle’s has struggled for years to break out of its single-digit organic growth mode. While hardware and services continue to drag sales, cloud services and support jumped 10% YoY for the quarter, marking a notable gain for the company’s largest revenue category. At the same time, operating margins improved 4% YoY for the quarter as did operating income. Operating cash flow also climbed to $19.1 billion for the trailing 12-month period, its highest level in over a decade. However, Capex, remains high at $7.9 billion. Nonetheless, that’s left plenty of cash to reduce total debt by $10 billion to $84.5 billion while paying out a combined $7.4 billion in dividends and share buybacks, yielding just shy of 2%. Valuation [Valuation] Source: Seeking Alpha Compared to its peers, Oracle seems to trade at a slight premium. While it’s cheaper than Microsoft (MSFT) on a price to cash flow ratio basis, it’s more expensive on a price to earnings ratio basis. It’s also far more expensive than Dell (DELL) on both those measures. However it is cheaper on a price to cash flow basis than both Zscaler (ZS) and Palo Alto Networks (PANW), though not by much. Growth [Growth] Source: Seeking Alpha What’s concerning is Oracle isn’t cheap yet it doesn’t come with the same kind of revenue growth as its peers. Oracle hasn’t even reached double digit year over year gains while everyone else on this list has and has done so for years except Dell. Profitability [Profit] Source: Seeking Alpha The one thing Oracle has going for it are its margins. However, its free cash flow margin is 10% lower than most of the others on this list. That needs to be better for a tech company without double digit sales growth. 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We’d treat it more like a blue chip stock, only taking positions when the stock trades at an obvious discount. [-facebook-share]( [-twitter-share]( [-linkedin-share]( [-email-share](mailto:?body= https%3A%2F%2Finvestingchannel.com%2F%3Fp%3D628957?utm_medium=ic-nl&utm_source=121933 ) News & Insights Just Spilled - [Pros Pick Their Top Nuclear Power Play]( - [Unlock Financial Clarity with The Juice]( - [Lululemon Athletica (LULU) is Growth at a Discount]( - [Should You Own the iPath VXX Volatility ETF?]( [News & Insights-facebook-share]( [News & Insights-twitter-share]( [News & Insights-linkedin-share]( [News & Insights-email-share](mailto:?body= https%3A%2F%2Finvestingchannel.com%2F%3Fp%3D628957?utm_medium=ic-nl&utm_source=121933 ) [We want to hear from you. Let us know your thoughts by clicking here]( [Ads] [InvestingChannel Logo](#) Follow us on: [Facebook Logo]( [LinkedIn Logo]( [Twitter Logo]( [Instagram Logo]( To ensure delivery of all emails, [allow us on your list](. 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