Oracle Corp. (NYSE:ORCL), the Redwood Shores, California-based global computer technology company, is going to release the financial results for the first quarter of fiscal 2018 Sept. 14 after the New York Stock Exchange closes.
Analysts forecast that the giant software maker will close the first quarter of fiscal 2018 showing at the bottom line of its income statement an EPS of 61 cents. This average figure of EPS is the result of surveyed analysts’ 31 estimates. These estimates range between a low of 59 cents and a high of 63 cents (see chart below).
Source: Yahoo Finance
This average EPS – as forecasted by analysts – is 6 cents higher than the comparable of fiscal 2017 and is backed on an average figure for revenue of $9.03 billion analysts forecast to come in at the end of the first quarter of fiscal 2018. Analysts’ estimates on Oracle’s revenue for the reporting quarter fall between $8.97 billion and $9.18 billion. Compared to the first quarter of one year ago, Oracle is expected to generate fewer sales according to an average declining 4.8% rate year over year.
Source: Yahoo Finance
Concerning average figures on earnings and sales for the entire fiscal of 2018, analysts expect that a figure of $2.95 for EPS will be dropped at the 2018 income statement’s bottom line from a revenue top line of $39.44 billion. Both figures represent 7.7% and 4.10% increases from full fiscal 2017.
For the full fiscal 2018 to full fiscal 2019 period and for the next five years, analysts estimate Oracle’s sales will grow 8.10% and 9.17%. The last growth rate is an annual average.
GuruFocus gives Oracle a profitability and growth rating of 7 out of a total of 10.
When the forward price-earnings (P/E) ratio of 16.45 is multiplied by the average figure of 2.95 for EPS – as estimated by the analysts for full fiscal 2018 – it yields a value of $48.53 versus a market value of $52.49 per share. The latter is only few cents below Oracle’s 52-week high of $52.61.
The analysts’ average target price per share for Oracle is $55.72. Even though the tech stock is trading close to its 52-week high (the 52-week low is $37.62), analysts rate Oracle a buying opportunity assigning a recommendation rating of 2.1. It ranges between 1.0 (Strong Buy) and 5.0 (Sell).
Let’s have a quick look at the most relevant figures on which Oracle’s solid balance sheet lies. The amount of cash on hand and securities at the end of the fourth quarter of fiscal 2017 was $66.08 billion. Total current assets and current liabilities were valued $74.52 billion and $24.18 billion. Therefore, the current ratio is 3.08 versus an industry average of 1.32. This signals that Oracle can meet its short-term financial obligations much easier than its peers.
The U.S. software marker had $57.91 billion in total debt as of the most recent quarter for a total debt-equity ratio of 106.75 versus an industry average of 113.26. Oracle is better positioned than most of its peers, also concerning the debt burden it can take. The company doesn’t have any problem in paying interest expenses on the outstanding debt, which is indicated by an interest coverage ratio that at 6.91 is well above the gold standard of 1.5 – as considered by investors – but below the industry average of 25.45.
GuruFocus gives Oracle a financial strength rating of 5 out of 10.
Oracle is trading at $52.49 per share with a market capitalization of $217.13 billion, a P/E ratio of 23.75, a price-book (P/B) ratio of 4.03 and a price-sales (P/S) ratio of 5.76.
The company distributes to its shareholders an annual dividend of 76 cents through quarterly payments of 19 cents for a dividend yield of 1.47%.
Oracle has approximately 4.14 billion shares outstanding, of which 3.01 billion is float, 27.25% is held by insiders and 59.84% is held by institutions.
Disclosure: I have no position in Oracle.
