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Wall Street Should Accept What Oracle Has Become

Stocks in this article: ORCL CRM WDAY TIBX CSCO APKT

NEW YORK ( TheStreet) -- I don't believe anyone has ever mistaken Oracle (ORCL) 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) and Workday (WDAY). 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) 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.

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