Strong Gross Profit Margin
High Return on Equity
Strong Operating and Net Profit Margins
Adequate Interest Coverage
💪 Strong Cloud Revenue Growth
🔑 Competitive Advantages in AI and Infrastructure
📈 RPO Growth Indicates Strong Demand
🚀 Anticipated Revenue Acceleration
📊 Strategic Multi-Cloud Partnerships
💻 Ongoing Innovation in AI
High Valuation Ratios
High Debt Levels
Low Liquidity Ratios
Overall, Oracle demonstrates a strong business quality with substantial growth in cloud services and a competitive edge in AI infrastructure. Its future prospects are bolstered by anticipated revenue acceleration, strategic partnerships, and ongoing innovation in technology. The company is well-positioned to continue its growth trajectory in the cloud market.
Analysis Date: December 9, 2024
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$138.48
Current Market Price: $124.96
IV/P Ratio: 1.11x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
10.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for ORCL
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (30.36)
P/B ratio ≤ 1.5 (22.07)
Current ratio ≥ 2.0 (1.02x)
Long-term debt < Net current assets (178.72x)
Margin of safety (10.0%)
ORCL does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Oracle's operating profit margin of 30.66% and net profit margin of 21.16% reflect efficient management and strong profitability, which is above industry averages.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
97.29%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
1.82%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
69.79%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
21.80%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
The interest coverage ratio of 4.86 indicates that Oracle comfortably covers its interest obligations, which is a positive sign of financial stability.
The debt-to-equity ratio of 6.45 and debt-to-assets ratio of 59.69% indicate a high reliance on debt financing, which can pose risks during economic downturns.
With a current ratio of 0.81 and quick ratio of 0.81, Oracle may struggle to cover short-term liabilities, indicating potential liquidity issues.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
5.58x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q3 2025
Current Ratio
Current assets divided by current liabilities
1.02x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q3 2025
Oracle's cloud services and license support now represent 77% of total revenue and are the fastest-growing segment, with cloud revenue expected to reach $25 billion this fiscal year. This demonstrates Oracle's strong market position in cloud services.
Oracle has positioned itself as a preferred cloud for AI workloads with the delivery of the world's largest AI supercomputer. Its unique architecture allows for flexibility in deploying cloud services, which is a significant advantage over competitors.
The remaining performance obligation (RPO) has grown 50%, indicating strong demand for Oracle's cloud services and longer contracts as customers see benefits from their services.
Oracle expects further acceleration of revenue growth in the coming quarters due to strong demand and a robust pipeline, with a goal of double-digit growth for fiscal year 2025.
Partnerships with Microsoft, Google, and AWS significantly enhance Oracle's market reach and provide customers with flexibility in cloud migration, which is crucial for expanding its services further.
Oracle is at the forefront of AI integration in its cloud services, offering tools that enable customers to leverage AI for various applications, signaling strong innovation potential.