Citi has increased its price target for Oracle (ORCL, Financial) from $186 to $196 while maintaining a Neutral rating on the stock. Following Oracle's fourth-quarter report, Citi expressed a cautiously optimistic view on the company's prospects for fiscal 2026. However, the firm's immediate earnings and free cash flow projections saw a downward revision, leading to a more tempered outlook for Oracle's short-term profitability.
Oracle's quarterly results were strong, although growth in bookings was modest. This was contrasted by an upbeat forecast for fiscal 2026, driven by strong performance in cloud services, remaining performance obligations, and overall revenue growth. Analysts noted this positive long-term sales potential despite the near-term challenges in profitability.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 31 analysts, the average target price for Oracle Corp (ORCL, Financial) is $207.57 with a high estimate of $246.00 and a low estimate of $150.00. The average target implies an upside of 3.86% from the current price of $199.86. More detailed estimate data can be found on the Oracle Corp (ORCL) Forecast page.
Based on the consensus recommendation from 41 brokerage firms, Oracle Corp's (ORCL, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Oracle Corp (ORCL, Financial) in one year is $142.51, suggesting a downside of 28.7% from the current price of $199.86. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Oracle Corp (ORCL) Summary page.
ORCL Key Business Developments
Release Date: June 11, 2025
- Total Revenue: $15.9 billion, up 11% from last year.
- Non-GAAP EPS: $1.70.
- GAAP EPS: $1.19.
- Total Cloud Revenue (SaaS + IaaS): $6.7 billion, up 27%.
- Total Cloud Services and License Support Revenue: $11.7 billion, up 14%.
- IaaS Revenue: $3 billion, up 52%.
- OCI Consumption Revenue: Up 62%.
- Cloud Database Services Revenue: Up 31%, annualized revenue of $2.6 billion.
- Autonomous Database Consumption Revenue: Up 47%.
- SaaS Revenue: $3.7 billion, up 11%.
- Application Subscription Revenues: $5 billion, up 8%.
- Software License Revenues: $2 billion, up 8%.
- Operating Income Growth: 7%.
- Full Fiscal Year Revenue: $57.4 billion, up 9%.
- Total Cloud Services and License Support Revenue (Full Year): $44 billion, up 12%.
- Operating Cash Flow (Full Year): $20.8 billion, up 12%.
- Free Cash Flow (Full Year): Negative $400 million.
- CapEx (Full Year): $21.2 billion.
- Cash and Marketable Securities: $11.2 billion.
- Short-term Deferred Revenue Balance: $9.4 billion.
- Shares Repurchased: Over 1 million shares for $150 million.
- Dividends Paid (Last 12 Months): $4.7 billion.
- Quarterly Dividend Declared: $0.50 per share.
- Remaining Performance Obligations (RPO): $138 billion, up 41%.
- Cloud RPO Growth: 56%.
- Operating Cash Flow (Q4): $6.2 billion.
- Free Cash Flow (Q4): Negative $2.9 billion.
- CapEx (Q4): $9.1 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Oracle Corp (ORCL, Financial) reported double-digit revenue growth in Q4, with total revenue and EPS exceeding guidance.
- The company's cloud transition has reached a tipping point, with cloud revenue (SaaS plus IaaS) up 27% to $6.7 billion.
- Oracle's infrastructure business, OCI, is experiencing exceptional demand, with revenue expected to grow over 70% in the current year.
- The company's strategic SaaS products are seeing strong bookings and higher renewal rates, contributing to accelerated growth.
- Oracle's remaining performance obligations increased to $138 billion, up 41% from last year, indicating strong future revenue potential.
Negative Points
- Oracle's free cash flow was negative $400 million for the fiscal year, with significant CapEx investments impacting cash flow.
- The company is facing supply constraints, unable to meet the high demand for its cloud services, leading to scheduling customers into the future.
- CapEx is expected to increase further to over $25 billion in FY26, which may strain financial resources.
- Despite strong growth, there is a lack of understanding among investors about the durability and profitability of Oracle's AI business.
- Oracle's cloud database migration from on-premise is still in progress, with a significant portion of the database business yet to transition to the cloud.
