ORACLE CORP (ORCL) Stock Analysis
ORACLE CORP
▾ What's in the 59/100 risk score? (higher = riskier)
Contributions (weight × component score) sum to the total. This near-term score now includes fundamental health (leverage, FCF trend, DCF applicability). See the Financial Health section for the full balance-sheet read.
How to read ORCL
A profitable, cash-generating business — our discounted-cash-flow estimate is the primary lens, cross-checked against what growth the price implies and against peers.
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1
The verdict + intrinsic value (our DCF) ↓
Our estimate of what a share is worth, versus today's price.
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2
Reverse-DCF + the interactive calculator ↓
See the growth the price assumes, then flex every assumption yourself to pressure-test it.
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3
Football field + peers ↓
A cross-check across methods and against comparable companies.
Is now a good time to buy ORCL?
Macro: Neutral / mid-cycle
ORCL trades at $158.78 vs an estimated
intrinsic value
of $45.94
— a +245.6% premium to model IV.
Today's price is consistent with ORCL's owner-earnings free cash flow per share growing about 40.0% per year 5-YR · SCENARIO PATH over the next 5 years (the
price-implied growth rate).
Our DCF projects
modeled growth
of 8.0% per year based on history + sector defaults
(analyst consensus estimates not yet integrated).
Note: this is a 5-year, per-share view. The Reverse-DCF section below asks the same question on a stricter 10-year free-cash-flowFree Cash Flow (FCF) — Operating cash flow minus capital spending: cash left after a company covers operating costs, taxes and interest and reinvests in the business — but BEFORE repaying debt principal or paying dividends. The cash actually available to investors.
Why it matters: A company can show big profits on paper while burning through cash. FCF is what actually fills the bank account.
Reference: Healthy mature businesses convert 8–15% of revenue into FCF · Growth companies often negative
Full explanation → basis — so its growth number is different, not contradictory.
▾ Exactly how this 5-year figure is computed
Current price: $158.78 (live)
Discount rate: 13.0%; terminal growth: 2.5%
Forecast: 5 years explicit growth, then a linear fade to terminal; end-of-period cash flows discounted to today
Growth path: the model's probability-weighted scenarios (conservative 40% / base 35% / optimistic 25%) — see the "Three Scenarios, Weighted" table below for the three IVs
Method: solve for the constant 5-year per-share growth rate that, run through this same structure, makes the intrinsic value equal today's price. (The 10-year figure below uses a flat 10-yr path instead — hence a different number.)
Not investment advice. The model can be wrong. Verify the assumptions in the sections below and consider consulting a licensed advisor for significant decisions.
What cash-flow improvement must the market believe? Reverse DCF — Instead of asking "what is this stock worth?", asks "what growth rate is the current market price already assuming?"
Why it matters: It crystallizes the bull thesis as a single number you can argue with. If the market expects 40% growth for 10 years and you do not believe that, the stock is overvalued.
Reference: 10–15% = sustainable for strong companies · 20–25% = exceptional · 30%+ = historically very rare
Reverse DCF treats today's price as correct and solves for the cash-flow path that justifies it. For a cyclical, read the result as the annual improvement in through-cycle free cash flow the price requires — which could come from stronger pricing, margin recovery, lower input costs (fuel, materials, labour), more volume, or reduced capex, not just organic growth. The starting base is our normalized mid-cycle median, not last year's number.
Why it matters: A company can show big profits on paper while burning through cash. FCF is what actually fills the bank account.
Reference: Healthy mature businesses convert 8–15% of revenue into FCF · Growth companies often negative
Full explanation → must improve by:
▾ Exactly how this 10-year figure is computed
Forecast length: 10 years, single flat growth rate (no fade)
Terminal growth after year 10: 2.5%
Discount rate: 13.0% (the rate the model used)
Price used: $158.78 — the live price shown on this page (not frozen)
Method: solve for the constant annual growth rate that makes the discounted 10-year FCF stream + terminal value equal today's price.
Few companies sustain 18-25% CAGR for a decade. A handful of historical compounders did — typically while still relatively small. Achieving this at mega-cap scale (\$500B+) is dramatically harder because the base is already enormous.
For reference: Exceptional is not a compliment here — sustaining mid-teens cash-flow growth for ten straight years is rare at scale. The price is betting on a top-tier outcome.
▾ How we computed this · Reality check thresholds · Assumptions
- Starting FCF/share: $3.59 (mid-cycle estimate (median operating cash flow less estimated maintenance capex — not the median of reported FCF))
- Discount RateDiscount Rate — The annual return you demand for taking single-stock risk instead of buying a safe Treasury or index fund.
Why it matters: Higher discount rate = stricter valuation (a stock has to produce more cash to be worth holding). Lower = more generous.
Reference: 8–12% is standard · 9–10% matches S&P 500 historical return · Below 7% is illogical for single-stock risk
Full explanation →: 13.0% — standard 8-12%; 9-10% matches S&P 500 historical return - Terminal Growth RateTerminal Growth Rate — The growth rate we assume the company holds forever, after the explicit 10-year forecast period ends.
Why it matters: It anchors the long-tail value. Cannot mathematically exceed long-term GDP growth or the company eventually becomes larger than the global economy.
Reference: 2–3% (matches long-term US GDP growth) · Above 4% is mathematically problematic
Full explanation →: 2.5% — matches long-term GDP growth - Forecast horizon: 10 years explicit + terminal perpetuity
| ≤ 0% | Priced for decline — likely undervalued OR dying business |
| 5-12% | Reasonable; sustainable for quality businesses |
| 12-18% | Demanding — strong execution required |
| 18-25% | Exceptional — few companies sustain for a decade |
| 25-35% | Heroic — historically very rare |
| 35%+ | Borderline impossible at scale |
Sustaining 30%+ cash-flow growth for a full decade at scale is exceedingly rare — the bar is brutally high.
Use the interactive calculator below to change the discount rate, growth and terminal-growth assumptions and watch the value move.
Football field: where does the price sit?
Different valuation methods produce different fair-value ranges depending on assumptions. Plotting them together lets you see at a glance whether the current price is reasonable across approaches, or only one specific lens.
Industry multiples sourced from: industry: Software. See the Peer Basket section below for the peer comparison and its limited-comparables caveat.
⚠ We found only 3 genuine same-industry (Software) comparables — fewer than the 4 we require for a reliable median. So we do not derive a peer-implied share value here. Read the multiples as rough context only.
How does ORCL stack up against its closest peers?
Ideally we compare ORCL only to same-industry peers, but too few exist in our universe right now, so the basket below mixes in broader-sector names. Treat the multiples as rough context, not a valuation. For a leveraged business, EV/EBIT and FCF yield (both in the table) are usually more reliable than EV/Sales, because revenue multiples ignore differences in margins and debt.
▾ What's "EV / Sales" in plain English?
EV (Enterprise Value) = market cap + total debt − cash. It's "what you'd pay to buy the entire company outright" — you pay the market cap to shareholders and take over their debt, but you keep their cash. EV is fairer than market cap alone because it includes the debt the new owner inherits.
EV / Sales = EV ÷ annual revenue. So "2.5×" means investors pay $2.50 of enterprise value per $1 of yearly sales. Higher = market is paying more per dollar of sales (usually because they expect future growth or fat margins).
p25 / median / p75 are the 25th, 50th (middle), and 75th percentile of the peers' multiples. Half the peers fall between p25 and p75. The median (p50) is the typical peer — that's the benchmark we compare to.
Bold middle number = median peer. Half the peers trade above it, half below. Computed over 3 peers (broad — see caveat); implausible multiples excluded.
⚠️ Important caveat: peer multiples only work if the peers are genuinely comparable. Always check the peer list below — if the auto-picker grabbed micro-caps or unrelated businesses, the comparison is noise. A medical-device giant priced against tiny biotech startups won't produce a useful signal.
Quality & solvency checks
Cheap stocks can be cheap for a reason. These screens warn when a low valuation comes paired with structural fragility.
Why it matters: Cheap-looking stocks (low P/E or P/B) often have low Z-scores because the market knows the company is dying. Z-score warns you before you fall into a value trap.
Reference: > 3.0 = safe zone · 1.81–3.0 = grey zone · < 1.81 = distress zone
Full explanation →
The Z-score needs working capital, retained earnings, EBIT, sales and total assets from the latest balance sheet, and at least one of those isn't reported in machine-readable form here — common for foreign private issuers. We leave it blank rather than compute a distress verdict from an estimated input. It doesn't affect the reported figures in the financial tables below.
▾ The checks — what passed, what didn't (and what we couldn't measure)
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✓ Positive net incomeNet income $12,443.0M in the latest year.
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✓ Positive operating cash flowOperating cash flow $20,821.0M (was $18,673.0M the prior year).
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✓ Cash flow backs up reported profitOperating cash flow $20,821.0M vs net income $12,443.0M.
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✗ Return on assets improvingReturn on assets 7.4% vs 7.4% a year ago. Flat year-over-year — the point requires strict improvement, so it isn't awarded, but this is not deterioration.Why this matters: Is the company squeezing more profit out of each dollar of assets than last year? Rising = getting more efficient; falling = the opposite.
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✓ Debt load (vs assets)Total debt is 4.3% of assets vs 7.5% a year ago ($7,271.0M now).
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✓ Short-term liquidity (current ratio)Current ratio 0.75x vs 0.72x a year ago — improved, but still below 1.0: the ✓ grades the trend, the level remains a caution flag.
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✗ Share count (dilution)Share count rose 1.5% (2,823.0M → 2,866.0M year-over-year).Why this matters: Issuing lots of new shares splits the pie into more pieces, shrinking your slice. Stable or falling share count protects existing owners.
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· Pricing power (gross margin) (n/a — data not reported; not scored)
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✗ Sales per asset (asset turnover)Asset turnover 0.34x vs 0.38x a year ago.Why this matters: Asset turnover measures how much revenue each dollar of assets generates. Rising = more productive use of the asset base.
Missing data is never counted as a pass or a fail — it's shown as n/a and excluded from the denominator. Each check compares the company against its own prior year.
What if you assume different inputs?
Here's where we land — and what happens if you change the assumptions. Drag the sliders to set your own Discount RateDiscount Rate — The annual return you demand for taking single-stock risk instead of buying a safe Treasury or index fund.
Why it matters: Higher discount rate = stricter valuation (a stock has to produce more cash to be worth holding). Lower = more generous.
Reference: 8–12% is standard · 9–10% matches S&P 500 historical return · Below 7% is illogical for single-stock risk
Full explanation → (the annual return you demand for single-stock risk) and terminal growth; the value updates live so you can see whether the stock looks cheaper or richer. The discount rate starts at 13.0%, the figure our model used for ORCL. Open Advanced to also change beta, growth and the rate path.
Note: at default inputs this calculator mirrors the headline model's three-scenario weighting (conservative/base/optimistic, 40/35/25), so its opening value should land close to the headline intrinsic value of $45.94. A small gap is rounding; a large one would be a data problem — and we check for it below.
13.0% — beta-based (CAPM), from this stock's BetaBeta — How much the stock moves when the overall market moves. 1.0 = moves with the market; 1.5 = moves 50% more than the market.
Why it matters: Higher beta = more volatile = should demand higher discount rate. Low beta stocks (utilities, consumer staples) move less.
Reference: Most stocks 0.5–1.5 · Defensives ~0.3 · High-vol tech ~1.5–2.0
Full explanation → of 1.54. The safe Treasury rate plus a premium scaled by how much more (or less) volatile the stock is than the market.
9.5% — sector/quality tier. A simpler hurdle set by industry and business durability: lower for stable, wide-moat companies; higher for speculative or micro-caps.
The headline value and this calculator start at 13.0% — the beta-based rate. Drag the slider to the other rate to see the full range.
+245.6%
At the default assumptions the flat path lands near our published value of $45.94. Move any slider to recompute it with your own.
Move any slider above to recompute this against your own assumptions.
⚙ Advanced — tinker with every input (beta, growth, rate path, margin → full intrinsic value)
ORCL is deeply overvalued by the model, trading at a premium of +391.5%. The market appears to be paying up for its consistent revenue growth of 9.1%/yr and positive operating cash flow, despite a low franchise/durability score of 2/5. The primary quantifiable risk is the significant divergence between the market's implied growth rate of 40.0% and the model's 8.0%.
As of 3 months ago
Anatomy of a share
What you're buying per share. Bars are at the same scale so you can see the relative size of revenue, costs, cash flow, and debt — not just read them in a table.
What's free cash flow / what do these mean?
Revenue per share — how much the business earns from customers, divided by the number of shares outstanding. Top of the income statement.
Earnings per share — profit left after operating costs, interest, and taxes, per share. Two versions appear on this page and are not interchangeable: GAAP diluted EPS uses the company's weighted-average diluted share count during the reporting period (this is the "earnings" in "price-to-earnings"); net income per current share divides annual net income by today's share count. They differ whenever the share count has changed.
Owner-earnings free cash flow per share — the cash the business produces for shareholders. Savng's owner-earnings FCF subtracts capital expenditures and stock-based compensation from operating cash flow (SBC is a real dilution cost even though it's non-cash). This is deliberately more conservative than "standard" FCF, which subtracts only capital expenditures — so our figure is lower than the headline FCF you'll see elsewhere. FCF funds dividends, buybacks, debt repayment, and acquisitions; a company can report positive earnings yet negative FCF.
Debt per share — total interest-bearing borrowings divided by shares. High debt-per-share next to thin FCF-per-share is a fragility signal.
What you actually need to decide
Every stock price is a disagreement. Here's the single thing that must go right for the bulls, the single thing that breaks the thesis, and the concrete signposts to watch so you can update your view as real results arrive.
- Growth rate of cloud services revenue in upcoming quarters
- Improvements in the current ratio above 1.0
- Announcements of major new cloud customer wins
The trend, in plain numbers (FY2024 → FY2025, latest reported)
Straight from the financial statements — no model, no opinion. For a small or unprofitable company, the direction of these numbers usually tells you more than any single valuation.
- Revenue grew +8% to $57.40B.
- Net income grew +19% to $12.44B.
- Free cash flow is negative at -$5.07B — the cash burn widened vs last year.
Management & Leadership
Larry Ellison, the co-founder, serves as Chairman and CTO, while Safra Catz has been CEO since 2014. Ellison's long tenure and continued involvement suggest a consistent strategic vision for the company's enterprise software and cloud offerings.
What They Make
Oracle provides enterprise software and cloud computing services, including database management systems, enterprise resource planning (ERP), and customer relationship management (CRM) software, primarily to businesses and government organizations.
End Markets
Revenue Drivers
Why Is It Priced Like This?
Why Customers Pay
The market prices ORCL at a premium of +391.5%, likely due to its consistent revenue growth of 9.1%/yr and positive operating cash flow, indicating a stable and expanding core business. The market may also be assigning value to the potential for further expansion in its cloud infrastructure and application services, which is not fully captured by backward-looking cash flow models.
Three Scenarios, Weighted
| Scenario | IV | Upside from today's price | Weight |
|---|---|---|---|
| Conservative | $40.01 | -74.8% | 40% |
| Base | $46.67 | -70.6% | 35% |
| Optimistic | $54.40 | -65.7% | 25% |
| Weighted | $45.94 | -71.1% | 100% |
Reading the last column: it is the move from today's price to each value (IV ÷ price − 1). The headline "premium/discount to model IV" measures the same gap from the value's side (price ÷ IV − 1), so the two percentages differ in size and sign by construction — e.g. a price 8% above value is a value 7.4% below price.
What has to be true (historical comparison)
To justify today's price, ORCL's owner-earnings cash flow must grow to roughly 5.4× its current level over 5 years. If profit margins and share count stay roughly constant, that is equivalent to about the same multiple of revenue. Each card below is a real company that grew revenue at a comparable magnitude — possibly in a different industry; the point is the growth magnitude required and its historical base rate, not that ORCL resembles these businesses. The green/amber line shows whether that company cleared or fell short of the bar, and the tag on the right shows how it actually fared afterward (succeeded, faded, or wiped out).
IPO'd at a $20B+ valuation on $1B revenue and a $1.2B loss. Bears called it bloated consulting; the bull case was government + AIP. Outcome still being written.
Real business, big profits, but ~80x P/E. Stock took 17 years to make a new all-time high. The business compounded the whole time; the valuation took a long break.
DVD-by-mail still 99% of revenue when streaming was launched. Stock 30x'd over the next decade — but only because the pivot succeeded. The pivot was not visible in 2007 fundamentals.
Anchors are hand-curated 10-K snapshots. We surface the three whose 5-year revenue growth most-closely brackets the rate required to justify the current price. Source: SEC EDGAR.
Business Model & Valuation
How They Make Money
Normalized FCF Medium
Mature company (rev $57.4B) with negative current FCF but positive OCF in 5/5 years: using normalized cash flow (median OCF minus maintenance capex).
Show advanced inputs
| Revenue Growth | 9.1% |
| Eps Growth | -1.2% |
| Historical Fcf Growth | -13.1% |
| Sector Default | 12.0% |
| Best Estimate | 10.0% |
| Method | blend(70% revenue_cagr, 30% sector) |
| Growth Basis | total |
What this model does NOT do: this is a consolidated owner-earnings FCF model. Standalone segment assumptions: none. It does not project product, services and recurring/cloud lines independently; their combined effect is embedded in the historical revenue and cash-flow trend the model extrapolates. The calculator above can only approximate a segment's impact through the single consolidated growth rate — it cannot model any one line separately. For a true segment-level view, build a separate model from the company's segment disclosures.
Maturity & Competitive Position
Moat Signals
Revenue has been growing at 9.1%/yr over the last four years, from $40479M to $57399M.
Geography & Markets
US-headquartered with significant international exposure across Europe and Asia, though exact segment split is not in current filings.
Geographic Risks
Market Signals
These are timing signals, not value signals — they describe the stock's recent price behavior, not what the business is worth. Use them for the "the thesis looks good, but is now the moment?" question. Each tile below explains what it's saying.
Why it matters: Short-term contrarian indicator. Extreme readings often precede mean reversion, though not always.
Reference: 30–70 normal · >70 overbought · <30 oversold
Full explanation → (14)75.1OverboughtBought up hard recently — stretched; pullbacks are common from here.
Why it matters: When the fast line crosses above the slow line, short-term momentum is turning up; below, turning down. A timing cue, not a value signal.
Reference: Line above signal = bullish momentum · below = bearish
Full explanation →BullishLine above signalThe fast trend is above the slow trend — short-term momentum is currently upward.
Technicals describe price, not the business. A great company can have a "bearish" tape (a buying chance) and a weak one a "bullish" tape (a trap). Pair these with the valuation and health sections above.
QUALITY
Data Quality & Risk Flags (3 notes — click to expand/collapse)
Guardrail Notes (3)
- Cyclical sector: using normalized cash flow (median OCF minus estimated maintenance capex).
- Median OCF: $17.16B, est. maintenance capex: $6.87B, normalized FCF: $10.30B.
- Price is 4.9x model IV - market may be pricing optionality, narrative catalysts, or margin expansion beyond what trailing cash flows support.
FINANCIALS
Financial Statements (5-year tables — click to expand)
From ORACLE CORP's SEC filings (EDGAR).
Income (5yr)
| Year | Revenue | Net Income | EPS |
|---|---|---|---|
| 2025 | 57.4B | 12.4B | $4.34 |
| 2024 | 53.0B | 10.5B | $3.71 |
| 2023 | 50.0B | 8.5B | $3.07 |
| 2022 | 42.4B | 6.7B | $2.41 |
| 2021 | 40.5B | 13.7B | $4.55 |
Cash Flow (5yr)
| Year | Operating CF | CapEx | − SBC & adj. | Free Cash Flow |
|---|---|---|---|---|
| 2025 | 20.8B | 21.2B | 4.7B | -5.1B |
| 2024 | 18.7B | 6.9B | 4.0B | 7.8B |
| 2023 | 17.2B | 8.7B | 3.5B | 4.9B |
| 2022 | 9.5B | 4.5B | 2.6B | 2.4B |
| 2021 | 15.9B | 2.1B | 1.8B | 11.9B |
How we define FCF: operating cash flow − capital expenditure − stock-based compensation (owner-earnings basis — SBC is a real cost to shareholders even though it's non-cash). Latest year: 20.8B − 21.2B − 4.7B (SBC & adj.) = -5.1B. This is the same owner-earnings FCF definition the valuation model uses, though the DCF's starting value is a mid-cycle estimate (median operating cash flow less estimated maintenance capex — not the median of reported FCF), not this single year.
Balance Sheet
| Total Assets | 168.4B |
| Total Liabilities | 147.9B (derived) |
| Equity | 20.5B |
| Total Debt | 7.3B |
Similar companies worth a look
Same sector and industry, similar fundamentals shape. Verify everything yourself — this list is computed mechanically and does not reflect our judgment about whether any of these are a good investment.