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TheStreet Open House

Why Oracle (ORCL) Stock Is Gaining Today

Stocks in this article: ORCL

NEW YORK (TheStreet) -- Oracle (ORCL) was gaining 1.6% to $39.60 Monday after announcing two new Oracle Cloud services: Oracle Database Backup and Oracle Storage Cloud.

Oracle Database Backup is part of the company's Platform as a Service portfolio which offers a low-cost cloud backup solution. The feature is tightly integrated with Oracle Recovery Manager so customers can still use RMAN commands to securely backup and recover data. The service will parallelize and compress backups to maintain high performance, and offers client-side encryption so the data is secure.

The new Oracle Storage Cloud is a part of the company's Infrastructure as a Service offerings. Oracle says the service is a reliable, scalable, and reliable object storage solution for organizations looking to store data in the cloud. The service is API compatible with OpenStack Swift and gives access to data through REST and Java APIs.

"To remain competitive in today's highly connected business environment, organizations are increasingly adopting and building new cloud-based solutions. There is also a huge push to migrate existing on-premises workloads to the public cloud and support portability between on-premises and cloud environments," Chris Pinkham, senior vice president of product development at Oracle said in a press release.

Must read: Warren Buffett's 10 Favorite Growth Stocks

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TheStreet Ratings team rates ORACLE CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate ORACLE CORP (ORCL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, notable return on equity and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • ORACLE CORP has improved earnings per share by 7.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ORACLE CORP increased its bottom line by earning $2.26 versus $1.97 in the prior year. This year, the market expects an improvement in earnings ($2.91 versus $2.26).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.5%. Since the same quarter one year prior, revenues slightly increased by 3.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Software industry and the overall market, ORACLE CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • You can view the full analysis from the report here: ORCL Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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