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The software company Oracle (New York Stock Exchange: ORCL) is expected to report quarterly earnings on Sept. 9 as investors wait to see if the company can maintain its momentum toward delivering cloud services as customers demand them. grows for data centers that can run AI workloads.
The consensus EPS estimate is $1.33 (+11.8% YoY) and the consensus revenue estimate is $13.24 billion (+6.3% YoY).
SA analyst Joseph Parrish believes the company’s growth outlook is positive, with potential for double-digit revenue growth and strong free cash flow generation. “Oracle has a compelling story in the current AI craze, and while many other companies have seen their valuations inflated to the value of their lifetime earnings, ORCL stands out as being reasonably priced, with room for pleasant surprises along the way,” Parrish added.
However, analyst Vladimir Dimitrov says Oracle’s business model is likely to become less profitable in the future. “The reason is that competing in the highly lucrative cloud infrastructure and applications space would affect Oracle’s pricing power,” he added.
Oracle shares rose last quarter after reporting fiscal fourth-quarter results and announcing the signing of several key artificial intelligence-focused deals with companies including OpenAI and Google, leading Wall Street to overlook a weaker-than-expected fourth quarter in favor of strong bookings and guidance.
Oracle said it expects first-quarter revenue to grow 6% to 7% year over year in constant currency, with cloud sales up 21% to 23%. Earnings should be between $1.31 and $1.35 per share, excluding one-time items.
Over the past 2 years, ORCL has beaten EPS estimates 75% of the time and has beaten revenue estimates 38% of the time.
Over the past 3 months, EPS estimates have seen 13 upward revisions and 5 downward revisions. Revenue estimates have seen 0 upward revisions and 19 downward revisions.