Where Oracle Stock Could Be Headed Next

Year-to-date, ORCL sports an over 38% lead

Dec 23, 2021 at 12:08 PM
facebook twitter linkedin

The shares of Oracle Corporation (NYSE:ORCL) are inching lower today, last seen down 0.2% at $89.68. The software concern has taken a nosedive on the charts over the past couple of weeks, despite news it is in talks buy electronic medical records provider Cerner (CERN) for $30 billion. The $89 mark seems like it could contain this pullback from a Dec. 10, all-time high of $106.25, however. Plus, ORCL sports a 38.8% year-to-date lead.


The brokerage bunch remains skeptical of Oracle stock. Of the 18 analysts in question, 13 carry a tepid "hold," while the remaining five call it a "strong buy." Meanwhile, the 12-month consensus target price of $102.64 is a 14.3% premium to ORCL's current perch.

The options pits echo that pessimism. This is per the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.05, which sits higher than 89% of readings in its annual range. This means near-term put open interest outweighs call open interest by a wider-than-usual margin.  

From a fundamental point of view, Oracle stock does not offer long-term security or growth potential. Aside from holding a relatively weak balance sheet, with $46.55 billion in cash and $87.01 billion in debt, its valuation also sits on the higher end. The security trades at a price-earnings ratio of 25.35, and a price-sales ratio of 7.44, which are both excessive given ORCL's growth rate in recent years.

What's more, Oracle's revenues are up just 4% since 2018, after it experienced back-to-back years of annual revenue declines in 2019 and 2020. ORCL's bottom-line growth is extremely inconsistent, despite an impressive net income increase of 168% since 2018.

Nonetheless, ORCL’s forward price-earnings ratio of 21.79 indicates that the company is expected to continue to see an increase in earnings in the coming year, perhaps making Oracle stock an opportunity for short-term traders.


Now is the time to join our thriving community of Event Traders who consistently profit from every earnings season. With this discounted subscription opportunity, you'll stay ahead of the curve and seize opportunities others miss. Do not let Q3 earnings season pass you by – subscribe now and supercharge your portfolio with expert insights that turn market reactions into profit-generating opportunities!! Don't waste another second... join us right now before the next trade targeting +200% is released!