NEW YORK ( TheStreet) -- It's getting progressively more difficult to look at the strong cash position of database giant Oracle (ORCL - Get Report), along with its deep market penetration, and not notice how undervalued the stock is.
As evident by its incredibly low forward price-to-earnings ratio of 10, it seems Wall Street cares very little about its prospects, especially compared to the high multiples enjoyed by rivals such as Salesforce.com (CRM - Get Report) and EMC (EMC - Get Report). Can Oracle overcome such profound doubt after recent earnings fell short of expectations?
An Un-Oracle-like Quarter
Oracle announced fiscal 2013 first-quarter results that were "un-Oracle-like." The company reported net income of 41 cents a share on revenue of $8.18 billion. The company missed on both the top and bottom lines as analysts were expecting EPS of $0.51 cents on sales of $8.45 billion. Working in its favor, profit rose 14% year-over-year, but revenue shed 2.3% from the same period of a year ago -- ending its streak of four consecutive quarters of revenue growth.
For its performance, the company's CFO, Safra Catz offered some insight on the Oracle's metrics with this statement in a company press release:"On a non-GAAP basis, new software licenses and cloud software subscriptions sales grew 11% in constant currency and operating margin increased to 44% in Q1," said Oracle President and CFO, Safra Catz. "Q1 operating cash flow increased to a record high of $5.7 billion. We're off to a good start in the new year." I have to agree that the company is indeed off to a solid start. Impressively, it reported net income of $2.03 billion -- representing a 10.5% increase from the previous year. Not only was this the third consecutive quarter of increased profits, but over the last five quarters Oracle has averaged almost 18% increase in that category. I wonder what else it can do to get Wall Street to care.