Shareholders of Oracle Corporation (NYSE:ORCL) will be pleased this week, given that the stock price is up 13% to US$140 following its latest yearly results. It looks like the results were a bit of a negative overall. While revenues of US$53b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.0% to hit US$3.71 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from Oracle's 29 analysts is for revenues of US$57.9b in 2025. This would reflect a solid 9.3% increase on its revenue over the past 12 months. Per-share earnings are expected to step up 16% to US$4.41. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$57.8b and earnings per share (EPS) of US$4.45 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 5.6% to US$145. It looks as though they previously had some doubts over whether the business would live up to their expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Oracle, with the most bullish analyst valuing it at US$175 and the most bearish at US$98.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Oracle's growth to accelerate, with the forecast 9.3% annualised growth to the end of 2025 ranking favourably alongside historical growth of 6.9% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. So it's clear that despite the acceleration in growth, Oracle is expected to grow meaningfully slower than the industry average.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Oracle. Long-term earnings power is much more important than next year's profits. We have forecasts for Oracle going out to 2027, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Oracle that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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