Should You Buy, Sell or Hold Oracle Stock Before Q4 Earnings?
Oracle ORCL is scheduled to report its fiscal fourth-quarter 2025 results on June 11.For the fourth quarter of fiscal 2025, total revenues are expected to grow in the band of 9-11% at constant currency (cc) and between 8% and 10% in dollar terms.The Zacks Consensus Estimate for revenues is currently pegged at $15.54 billion, suggesting growth of 8.8% from the year-ago quarter's reported figure.The company's non-GAAP EPS is expected to grow 0% to 2% and be in the range of $1.62-$1.66 at cc and between $1.61 and $1.65 in USD.The consensus mark for earnings is pegged at $1.64 per share, unchanged over the past 30 days. The figure indicates 0.61% growth from the year-ago period.
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In the last reported quarter, Oracle delivered a negative earnings surprise of 0.68%. Markedly, the company's earnings missed the Zacks Consensus Estimate in three of the trailing four quarters, while beating the same once, the average being 0.83%.
Oracle Corporation price-eps-surprise | Oracle Corporation Quote
(Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)
Our proven model does not conclusively predict an earnings beat for Oracle this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.Oracle has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today's Zacks #1 Rank stocks here.
As Oracle approaches the fourth-quarter earnings release, investors are weighing strong cloud momentum against recent execution challenges. The database giant's fiscal third-quarter results demonstrated robust demand fundamentals, with remaining performance obligations reaching $130 billion. However, the company missed both earnings and revenue expectations, raising questions about near-term execution.The fiscal fourth quarter is likely to have benefited from Oracle's aggressive cloud infrastructure expansion and strategic partnerships. The company's collaboration with Alphabet GOOGL-owned Google Cloud, announced in April, expanded Oracle Database services across additional regions and introduced new partner programs. Similarly, the general availability of Oracle Exadata Database Service on Oracle Database@Azure in March positioned the company to capture multi-cloud database workloads. These partnerships with Google and Microsoft MSFT addressed a key growth constraint by extending Oracle's reach beyond its native cloud infrastructure.Oracle's AI initiatives gained traction throughout the quarter. The integration of NVIDIA NVDA AI Enterprise on Oracle Cloud Infrastructure in March strengthened the company's AI training capabilities, while new AI agent functionalities embedded within Oracle Textura Payment Management and other cloud applications enhanced product differentiation. The introduction of Oracle Energy and Water Data Exchange demonstrated the company's sector-specific AI solutions, potentially driving adoption in vertical markets.However, capacity constraints that hindered fiscal third-quarter growth may have persisted in the quarter under review, potentially limiting revenue conversion despite strong booking activity.
Shares of ORCL have declined 10.1% in the past six months compared with the Zacks Computer and Technology sector's 1.2% decrease.
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While Oracle has a strong foothold in the database management and ERP software markets, its competitors are making significant inroads in the cloud space. AWS, Google Cloud and Microsoft Azure combined accounted for a whopping 63% of total enterprise spending on cloud infrastructure services during the first quarter of 2025, according to new data from IT market research firm Synergy. Oracle has also underperformed its cloud peers in the past six-month period.It is also important to consider whether the stock's current valuation accurately reflects the company's long-term growth potential and ability to navigate the competitive landscape.ORCL is trading at a premium with a price/book of 27.73X compared with the Zacks Computer-Software industry's 8.89X, reflecting a stretched valuation.
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Oracle's investment proposition presents a balanced risk-reward scenario ahead of fourth-quarter fiscal 2025 results. The company demonstrates compelling long-term fundamentals through its $130 billion remaining performance obligations, strategic AI initiatives, and expanding multi-cloud partnerships with Google and Microsoft. However, recent execution challenges, including third-quarter earnings and revenue misses, coupled with persistent capacity constraints, suggest near-term volatility. Oracle's premium valuation relative to cloud peers adds downside risk if growth acceleration fails to materialize. While the company's database franchise and AI positioning provide competitive advantages, investors should maintain current holdings while monitoring operational improvements before significantly increasing exposure.
Oracle presents a balanced investment opportunity with strong fundamentals offset by execution uncertainties. The company's substantial cloud backlog and AI positioning support long-term growth prospects, yet recent performance volatility and premium valuation warrant caution. Current shareholders should maintain their positions, while prospective investors may benefit from waiting for improved operational clarity or more attractive entry points following fourth-quarter results. The fiscal fourth-quarter results will likely determine whether Oracle can translate its substantial backlog into consistent revenue acceleration.
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