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Oracle Selloff Is a Long-Term Buy Opportunity

Stocks in this article: ORCL CRM WDAY MKTG

NEW YORK ( TheStreet) -- Shares of database giant Oracle (ORCL) are trading down close to 3% Wednesday on disappointing fiscal third-quarter earnings results.

Oracle's stock, which has traded in a tight range since the beginning of the year, continues to be a source of frustration for investors. The stock closed 2013 at $38.14. On the year-to-date, shares are down 1.25% to $37.66 as of this writing.

The story has been Oracle's lack of revenue growth. Worse, Oracle is perceived unresponsive to the likes of (CRM) and Workday (WDAY). These rivals have ushered in a new generation of cloud-based business applications software that's killing off customers' need for services that brought Oracle to prominence.

WATCH: Oracle Presents Trading Opportunity on Earnings Dip

Although Oracle continues to make headway in enterprise software and cloud-based services, growth has not come in sufficient quantities. And Tuesday's results, which delivered third-quarter revenue of $9.3 billion, were no different. Although revenue was up 4% year over year, it missed analysts' estimates of $9.36 billion.

Oracle showed moderate strength in new software licenses and cloud software subscriptions. That business posted revenue of $2.4 billion, which was up 4% year over year. But that wasn't enough to please analysts.

Given the improved IT spending environment, analysts like Daniel Ives of FBR Capital Markets were looking for stronger numbers. Ives expected the cloud/subscription segment to post growth of 7%.

Ives has been extremely critical of Oracle and noted that the company is struggling with internal execution issues. Although Ives credited Oracle as having shown "some improvement," he insists, "they still have a bit of an uphill battle as they try to turn the ship around."

But with respect to Ives, Oracle's results weren't all bad. The company posted 5% increase in software license updates and product support revenues, which totaled $4.6 billion.

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