This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Wall Street Should Accept What Oracle Has Become

NEW YORK ( TheStreet) -- I don't believe anyone has ever mistaken Oracle (ORCL - Get Report) for a growth company -- at least not in the last 10 years.

While Oracle has certainly taken what I believe were prudent and necessary strides to grow into areas like SaaS, or software-as-a-service, and Big Data, the company's recent performance, including its first-quarter earnings results, confirmed what the Street has long assumed to be true -- Oracle can't escape the shadows of nimbler rivals including Salesforce.com (CRM - Get Report) and Workday (WDAY - Get Report). But it doesn't have to.

As dominant as the database giant has been over the years, the times are indeed changing. Much as I respect the database giant, I can't continue to blame Oracle's less-than-stellar revenue results on the economy and poor enterprise spending when rivals like Tibco (TIBX - Get Report) have become brash about the number of deals they've won. The fact of the matter is, the competition has grown fierce. There's no other way to spin it. While Oracle's certainly producing impressive profits, it's time to rethink from where the long-term value is going to come.

The thing is, after Oracle offered weaker-than-expected second-quarter guidance, the stock is destined to remain "rangebound" for the foreseeable future. Oracle is a good stock but it is better for the long-term investor, especially those who value a strong balance sheet and a decent yield. For everyone else, it's time to grab a Snickers bar.

I'm not going to blow this quarter out of proportion and tell you that it was terrible. When all things are considered, I believe the results, which arrived pretty much on-target with management's prior guidance, were actually decent. As has been the case for several quarters, Oracle again exceeded non-GAAP earnings-per-share expectations, earning 59 cents per share, or 6 cents more than consensus estimates.

Revenue, meanwhile, continues to disappoint. Non-GAAP total revenue was up 2% year over year to $8.4 billion. Granted, 2% revenue growth is not on the same level of Salesforce.com's 31% growth, but it's nonetheless encouraging that Oracle more than doubled its growth output for the June quarter.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
TIBX $24.03 0.00%
CRM $66.90 1.66%
CSCO $28.48 2.02%
ORCL $43.32 0.74%
WDAY $86.11 2.06%

Markets

DOW 18,034.93 +208.63 1.17%
S&P 500 2,100.40 +19.22 0.92%
NASDAQ 4,994.6020 +62.7870 1.27%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs