Oracle (ORCL) Downgraded by Zacks Investment Research

Zacks Investment Research lowered shares of Oracle (NYSE:ORCL) from a hold rating to a sell rating in a research report released on Thursday.

According to Zacks, “Oracle provides enterprise-grade database, middleware and application software. Stiff competition in the cloud market from dominant players is anticipated to limit margin expansion. Further, lower hardware volumes are anticipated to hurt top-line growth consequently keeping margins under pressure. Additionally, integration risks from buyouts remain a concern. Estimates have remained stable lately ahead of Q2 results. Notably, shares of Oracle have underperformed industry in the past year. However, Oracle is benefiting from strong adoption of its cloud-based solutions, comprising Fusion ERP and Fusion HCM, among others. We note that partnerships with the likes of Accenture are helping Oracle to rapidly expand its cloud-based clientele. Also, anticipated strong demand for the next-generation autonomous database supported by machine learning will boost competitive position against AWS. Oracle has a positive record of surprises in recent quarters.”

Other research analysts have also issued research reports about the stock. Nomura set a $58.00 price objective on shares of Oracle and gave the company a buy rating in a research report on Tuesday, September 18th. Credit Suisse Group reissued a buy rating and issued a $60.00 target price on shares of Oracle in a research note on Tuesday, September 18th. Goldman Sachs Group reissued a buy rating and issued a $55.00 target price on shares of Oracle in a research note on Tuesday, September 18th. Stifel Nicolaus reissued a hold rating and issued a $49.00 target price (down previously from $50.00) on shares of Oracle in a research note on Tuesday, September 18th. Finally, KeyCorp reissued a hold rating on shares of Oracle in a research note on Wednesday, September 12th. One investment analyst has rated the stock with a sell rating, sixteen have assigned a hold rating and fifteen have assigned a buy rating to the company. The stock presently has a consensus rating of Hold and an average price target of $53.71.

Shares of ORCL traded up $0.17 during trading hours on Thursday, reaching $48.79. 361,113 shares of the company traded hands, compared to its average volume of 17,600,294. The firm has a market capitalization of $201.27 billion, a P/E ratio of 17.32, a P/E/G ratio of 1.63 and a beta of 1.12. The company has a debt-to-equity ratio of 1.41, a quick ratio of 3.43 and a current ratio of 3.43. Oracle has a 1-year low of $42.57 and a 1-year high of $53.48.

Oracle (NYSE:ORCL) last announced its quarterly earnings data on Monday, September 17th. The enterprise software provider reported $0.71 EPS for the quarter, beating the Zacks’ consensus estimate of $0.68 by $0.03. The business had revenue of $9.20 billion during the quarter, compared to analyst estimates of $9.26 billion. Oracle had a net margin of 9.74% and a return on equity of 25.60%. The firm’s revenue for the quarter was up .8% on a year-over-year basis. During the same quarter in the prior year, the business earned $0.62 earnings per share. As a group, equities analysts forecast that Oracle will post 3.06 earnings per share for the current year.

Oracle declared that its Board of Directors has authorized a stock buyback plan on Monday, September 17th that allows the company to repurchase $12.00 billion in outstanding shares. This repurchase authorization allows the enterprise software provider to purchase up to 5.9% of its stock through open market purchases. Stock repurchase plans are typically a sign that the company’s board of directors believes its stock is undervalued.

The firm also recently disclosed a quarterly dividend, which was paid on Tuesday, October 30th. Investors of record on Tuesday, October 16th were issued a $0.19 dividend. The ex-dividend date of this dividend was Monday, October 15th. This represents a $0.76 annualized dividend and a yield of 1.56%. Oracle’s dividend payout ratio is currently 26.95%.

In related news, EVP Dorian Daley sold 131,696 shares of the stock in a transaction that occurred on Monday, September 24th. The shares were sold at an average price of $50.93, for a total value of $6,707,277.28. Following the transaction, the executive vice president now directly owns 109,615 shares in the company, valued at $5,582,691.95. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, Director Hector Garcia-Molina sold 3,750 shares of the stock in a transaction that occurred on Monday, September 17th. The shares were sold at an average price of $49.42, for a total transaction of $185,325.00. Following the completion of the transaction, the director now owns 27,969 shares in the company, valued at $1,382,227.98. The disclosure for this sale can be found here. Insiders sold 142,946 shares of company stock worth $7,257,365 over the last 90 days. 32.00% of the stock is currently owned by company insiders.

A number of hedge funds and other institutional investors have recently made changes to their positions in the stock. FMR LLC increased its position in shares of Oracle by 21.4% during the second quarter. FMR LLC now owns 47,683,832 shares of the enterprise software provider’s stock worth $2,100,949,000 after acquiring an additional 8,401,411 shares in the last quarter. Loomis Sayles & Co. L P increased its position in shares of Oracle by 1.6% during the third quarter. Loomis Sayles & Co. L P now owns 39,519,223 shares of the enterprise software provider’s stock worth $2,037,611,000 after acquiring an additional 625,051 shares in the last quarter. Magellan Asset Management Ltd increased its position in shares of Oracle by 11.3% during the third quarter. Magellan Asset Management Ltd now owns 30,787,975 shares of the enterprise software provider’s stock worth $1,587,428,000 after acquiring an additional 3,124,391 shares in the last quarter. Franklin Resources Inc. increased its position in shares of Oracle by 13.1% during the third quarter. Franklin Resources Inc. now owns 29,336,984 shares of the enterprise software provider’s stock worth $1,512,636,000 after acquiring an additional 3,393,152 shares in the last quarter. Finally, Vulcan Value Partners LLC increased its position in shares of Oracle by 3.8% during the second quarter. Vulcan Value Partners LLC now owns 25,019,520 shares of the enterprise software provider’s stock worth $1,102,360,000 after acquiring an additional 922,785 shares in the last quarter. Institutional investors and hedge funds own 50.95% of the company’s stock.

Oracle Company Profile

Oracle Corporation develops, manufactures, markets, sells, hosts, and supports application, platform, and infrastructure solutions for information technology (IT) environments worldwide. The company provides services in three primary layers of the cloud: Software as a Service, Platform as a Service, and Infrastructure as a Service.

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