Oracle- ORCL

Fundamental analysis
Oracle is an American multinational technology and computer company that was founded in 1977 in Santa Clara, California, USA. Today, it is headquartered in Austin, Texas (although its main offices and development remain in California). In 2020, it was the third largest software company in the world by sales and market capitalization. The company focuses on database software, cloud and total solutions for medium and large businesses through “eterprise software”. This is the kind of software that comprehensively covers the needs of a company rather than the needs of an individual user. The ISM of services in April reached a number of 49.4 indicating a shrinking US economy. ORCL has been growing turnover regularly for the last few years and that includes the covid period. However, gross profit has been around $15 billion for several years. Net profit has been oscillating between USD 6 and 13 billion in recent years.
Results
Oracle’s cloud and database business has been particularly successful. The cloud infrastructure business achieved a turnover of USD 1.8 billion in the last quarter. This is an increase of 49%. Turnover from the Cloud section reached USD 5.1 billion, an increase of 24% in the last quarter. The company was able to sign new contracts, bringing the total back log of contracts to USD 80 billion, the highest amount in the company’s history. Turnover grew by 7%. ORCL achieved a GAAP operating margin of 28%. The company agreed to a dividend of $0.4 per share, which was paid in April 2024. Over the past 1 year, the share price has increased 19%.
Technical analysis
The moving averages are in an uptrend, but a very decent one, and the spread between the averages is currently decreasing rather than increasing. This points to the stock not having a compelling trend. The RSI is right in the middle of its limits. The price is in a channel between resistance at $127 per share and support at $106 per share.
Conclusion
Technology companies are doing well. Cloud companies in particular. Oracle has been a bit sidelined by media attention from other players like Microsoft, Facebook, Apple, etc. Yet, this stock is also generating solid returns. A regular dividend and growth driven by economic fundamentals delivers an average but steady yield. But that may now be over. The stock’s economic outlook is neutral, technical analysis too. It may be interesting to wait for the stock to reach the edge of the channel (at either the $106 or $127 per share price) and watch its behavior there. At the current state of affairs, the stock can both rise and fall.