Shares of Oracle Corp. (ORCL) are up more than 11% this Tuesday morning after the company delivered solid Q3 earnings, outpacing analysts on the bottom line despite coming up a bit short on the top line.

The company grew revenue 7% to 13.28 billion, but this fell just shy of the $13.3 billion analysts were expecting. That being said, profits were up big, as net income improved 27% to $2.4 billion. This contributed to an earnings per share of $1.41 on an adjusted basis, beating the consensus of $1.38. 

Much of this growth can be attributed to sales improvements in the Oracle Cloud Services and License Support segments. As the biggest business under the Oracle umbrella, the segment improved by 12%.

Oracle also benefited from a few hefty cloud infrastructure contracts during the third quarter. Cloud revenue as part of the cloud services unit saw a 25% uptick. One of these contracts is Microsoft, which ordered 20 data centers – 3 of which were added just this week.

CEO Safra Catz says that there is more to come, too, with several contracts coming down the pipeline still. That being said, the company is optimistic that it will surpass the goal of $65 billion in sales by 2026. In fact, Catz says that with the trajectory the company is on, this goal may be too modest.

Looking ahead to the near term, Oracle shared its Q4 guidance as well. The company expects to deliver revenue growth of 4-6% compared to the $13.8 billion delivered in Q4 2023. This would fall short of analyst expectations, though, with an outlook of $14.7 billion. Meanwhile, Oracle says earnings should fall between $1.62 to $1.66 vs the analysts consensus of $1.64.

ORCL has surged more than 21% through the first 3 months or so of 2024 and is up more than 52% since this time last year. All that being said, we found 3 other reasons to strongly consider buying this stock today. Here’s what we discovered in the VectorVest stock analysis software…

ORCL Has Very Good Upside Potential and Timing With Good Safety to Boot

VectorVest is a proprietary stock rating system that simplifies your investment strategy, empowering you to win more trades with less work and stress. You’re given all the insights you need in 3 ratings: relative value (RV), relative safety (RS), and relative timing (RT). 

Each sits on its own scale of 0.00-2.00 with 1.00 being the average, making interpretation quick and easy. Better yet, the system issues a clear buy, sell, or hold recommendation based on the overall VST rating for any given stock at any given time. Here’s what you need to know about ORCL:

  • Very Good Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (forecasted 3 years out), AAA corporate bond rates, risk, and other factors. It offers much better insight than a simple comparison of price to value alone. ORCL has a very good RV rating of 1.27. Further to that point, the stock is undervalued - with a current value of $140/share.
  • Good Safety: The RS rating is a risk indicator. It’s calculated from an analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. The RS rating of 1.13 is good for ORCL.
  • Very Good Timing: The RT rating is based on the direction, dynamics, and magnitude of a stock’s price movement. It’s taken day over day, week over week, quarter over quarter, and year over year. The RT rating of 1.32 is very good and reflects ORCL’s performance in both the short and long term.

The overall VST rating of 1.25 is very good, and it earns the stock a BUY recommendation. But before you do anything else, learn more about this opportunity with a free stock analysis at VectorVest - transform your trading strategy and make your next move with confidence!

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VectorVest advocates buying safe, undervalued stocks, rising in price. ORCL is up more than 11% after a solid Q3 performance, and an upbeat outlook for both the short and long term ahead. The stock has good safety coupled with very good upside potential and timing.

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