The Ratings Game: Oracle’s ‘practically perfect’ earnings report sends stock higher

by | Dec 14, 2022 | Stock Market

Oracle Corp.’s cloud offerings and its Cerner business were highlights of the software company’s second-quarter results, analysts say. Oracle
ORCL,
-0.89%
beat Wall Street’s top- and bottom-line expectations with its fiscal second-quarter results on Monday, even though the company delivered a mixed outlook, exceeding the consensus view with the implied revenue forecast but missing with its profit targets.

Nonetheless, the report was “practically perfect,” in the view of Bernstein analyst Mark Moerdler. “The strength of the quarter and the guidance continues to prove how well positioned Oracle is to weather the economic turbulence successfully,” he wrote, while reiterating an outperform rating and bumping up his price target by a buck, to $103. “As we have written previously and this quarter further validated, we believe Oracle is the best risk/reward in software.” Lifted by the results, Oracle’s stock rose 4.6% shortly after the market opened on Tuesday. Oracle’s stock has fallen 2.8% in 2022, compared with the S&P 500’s
SPX,
+0.73%
decline of 14.5%. In a note released on Tuesday, JPMorgan pointed to health across Oracle’s business and to continued momentum around the company’s Oracle Cloud Infrastructure (OCI) offerings. Oracle noted that multiple $1 billion-plus OCI deals closed during the quarter, which likely includes a “large win” from Amazon.com Inc.’s
AMZN,
+2.14%
Amazon Web Services, according to JPMorgan. Now read: Oracle stock rises as earnings and revenue beat, but profit forecast comes in slightly short “Overall, we believe Oracle’s resilient, sticky, and largely recurring revenue stream positions the company well to relatively outperform in a post-pandemic environment,” wrote JPMorgan analyst Mark Murphy. “We are encouraged by the underlying organic revenue growth and solid organic backlog growth in the recent quarter and believe the cloud shift continues to progress.” Oracle’s acquisition of electronic-medical-records company Cerner is also driving automation in …

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